MONOPOLIES 


AND 


PEOPLE 


BY 

D.  C.  CLOUD, 

MUSCAT1NE. 


"  THE  ENUMERATION  IN  THE  CONSTITUTION  OF  CERTAIN  RIGHTS  SHALL  NOT  BE  CONSTRUED  TO  DENY  OR 
DI3PAKAGE  OTHERS  RETAINED  BY  THE  PEOPLE." 

"  THE  POWERS  NOT    DELEGATED  TO  THE   UNITED  STATES  BY  THE   CONSTITUTION,  NOR  PROHIBITED  BY  IT 
TO  THE  STATES,  ARE  RESERVED  TO  THE  STATES  RESPECTIVELY,  OR  TO  THE  PEOPLE." 

» 

— Articles  IX.  and  X.  of  the  Constitution  of  the  United  Suite*. 


DAVENPOET,  IOWA: 

DAY,    EGBEKT,    &    FIDLAR. 

1873. 


Entered  according  to  Act  of  Congress,  in  the  year  1873. 

By  D.  C.  CLOUD, 
in  the  Oflice  of  the  Librarian  of  Congress,  at  Washington. 


TO  THE 


WHO    HAVE    BECOME   THE    PIONEER   CORPS    IN   THE    EFFORTS   BEING 

MADE  TO  REFORM  THE  ABUSES  NOW  OPPRESSING  THE  COUNTRY, 

AND  WHO    ARE    EARNESTLY  AND    EFFICIENTLY  LABORING 

FOR   THE     RESTORATION   OF   THE    RIGHTS    OF   THE 

PEOPLE,  WITH  THE  HOPE  THAT  IT  MAY  AID 

THEM  IN  THEIR  PATRIOTIC  WORK,  THIS 

BOOK  IS  RESPECTFULLY  DEDICATED 

BY 

THE  AUTHOR. 


PREFACE. 


TO  THE  READER. 

FOR  two  years  past  the  author  has  awaited  the  auspicious 
moment  for  presenting  to  the  public  his  views  upon 
the  oppressions  and  abuses  practiced  by  corporations 
and  combinations  of  men  who  were  apparently  getting  a  con 
trolling  influence  over  the  commerce,  finances,  and  govern 
ment  of  the  country.  Recent  action  on  the  part  of  the  people 
has  convinced  him  that  his  opportunity  has  come,  and  he 
embraces  it.  He  has  aimed  to  present  a  true  history  of  the 
operations  of  the  different  monopolies. 

Since  he  began  the  preparation  of  his  work,  some  events 
have  taken  place  not  noticed  by  him.  Oakes  Ames  and 
James  Brooks,  two  prominent  characters  among  railroad 
men,  and  whom  he  has  had  occasion  to  name,  have  died. 
Some  changes  in  the  laws  of  congress  have  been  made  af 
fecting  the  interests  of  corporations.  The  law  requiring  the 
secretary  of  the  treasury  to  retain  but  one -half  of  the  earn 
ings  from  the  government  of  the  Pacific  roads  to  apply  on 
the  interest  due  to  government  on  subsidy  bonds,  has  been 
repealed,  and  he  may  now  retain  and  apply  the  whole  amount. 
Suit  has  also  been  brought  against  the  Union  Pacific  com 
pany  because  of  its  dishonest  practices. 

On  the  whole,  however,  combinations  of  corporations,  and 
other  rings  and  organizations,  at  war  with  the  best  interests 
of  the  people,  have  acquired  new  strength  and  more  power 
within  the  last  few  months. 


IV  PREFACE. 

The  reader  will  notice  the  fact,  that  while  the  author  has 
quoted  liberally  from  the  statutes  and  resolves  of  congress 
to  show  the  great  privileges  and  powers  conferred  upon 
railroad  companies,  and  familiarized  the  reader  with  their 
financial  and  other  transactions  for  a  clear  understanding  of 
their  manner  of  doing  business,  he  has  not  pretended  to  give 
a  full  history;  satisfying  himself  with  such  chapters  as  would 
place  before  the  public  the  true  character  of  these  monopo 
lies. 

The  author  has. sought  to  present  truthful  statements  of 
matters  in  connection  with  the  various  interests  now  so  hos 
tile  to  the  rights  of  the  people,  and  he  believes  he  has  em- 
hodied  the  facts  as  they  exist. 

D.  C.  C. 

MUSCATINE,  Iowa,  July  28,  1873. 


TABLE  OF  CONTENTS. 


CHAPTER  I. 

PAGES. 

A  PRELIMINARY  SURVEY,  .  .  .  15-18 

CHAPTER  II. 

THE  PACIFC  RAILROAD  INIQUITY,  .  .  19-28 

CHAPTER  III. 
THE  MONOPOLISTS   "HELP  THEMSELVES,"  .  29-39 

CHAPTER  IV. 

How  CONGRESS  BETRAYED  THE  PEOPLE,     .  .  40-48 

CHAPTER  V. 

CONGRESS  BECOME  A  STOCK  EXCHANGE,      .  .  49-55 

CHAPTER  VI. 

How  THE  LAND  GRANT  RAILROADS  "!)EVELOPE"  A 

COUNTRY,          .....  56-62 

CHAPTER  VII. 
THE  CREDIT  MOBILIER  AND  A  VILLAINOUS  CONTRACT,         63-80 

CHAPTER  VIII. 

HAS  CONGRESS  THE  POWER,  UNDER  THE  CONSTITUTION, 

TO  CREATE  OR  ENDOW  PRIVATE  CORPORATIONS?  81-91 


VI  TABLE    OF    CONTENTS. 

CHAPTER  IX. 

STATE  RIGHTS  AT  THE  BAR  OF  A  CORRUPT  CONGRESS,  92-98 

CHAPTER  X. 

AN  UNSETTLED  ACCOUNT — A  GUILTY  DIRECTORY,  99-105 

CHAPTER  XI. 

SOLE  PURPOSES  OF  TAXATION,  .  .  .         106-111 

CHAPTER  XII. 

THE  RIGHT  OF  EMINENT  DOMAIN — UNCONSTITUTION 
ALLY  OF  MUNICIPAL  AID  TO  RAILROADS,  .  112-122 

CHAPTER  XIII. 

THE   FATAL   POLICY  OF   MORTGAGING  CITIES   AND 

COUNTIES  FOR  THE  CONSTRUCTION  OF  RAILROADS,       123-129 

CHAPTER  XIV. 

THE  IMPOVERISHING  TRANSPORTATION  SYSTEM — THE 

WAREHOUSE  CONSPIRACY,          .  .  .         130-137 

CHAPTER  XV. 

A  NEW  AND  FALSE  PRINCIPLE  IN  HYDRAULICS  — 
WATERED  STOCK — ITS  UNLAWFUL  PROFITS  THE 
SOURCE  OF  EXTORTIONATE  TARIFFS — THE  FAST 
DISPATCH  SWINDLE,  ....  138-146 

CHAPTER  XVI. 

A  PRIVILEGED  CLASS — THE  MONOPOLISTS  RELIEVED 
OF  THE  BURDENS  OF  TAXATION — AN  OUTRAGE 
UPON  REPUBLICAN  GOVERNMENT,  .  145-151 


TABLE    OF    CONTENTS.  Vll 

CHAPTER  XVII. 

THE  STRONG  GRASP  OF  CONSOLIDATED  CAPITAL  UPON 
AMERICAN  LEGISLATION — BEECHER  ON  "REF- 
ORMATION^OR^REVOLUTION  " — HISTORY  OF  RAIL 
WAY  LEGISLATION  IN  IOWA,  .  .  .  152-168 

CHAPTER  XVIII. 

THE  "TRAIL  OF  THE  SERPENT"  IN  THE  INTERIOR 

DEPARTMENT,  ....         169-179 

CHAPTER  XIX. 

THE  MONOPOLISTS  AT  THE  DOOR  OF  THE  WHITEHOUSE,        180-185 

CHAPTER  XX. 

THE  UNITED  STATES  TREASURY  THE  VASSAL  OF  WALL 

STREET — STOCK  "OPERATIONS"  EXPLAINED,     .         186-197 

CHAPTER  XXI. 

How  WALL  STREET  BUILDS  RAILROADS — A  HOT 
BED  OF  CORRUPTION,  ....  198-201 

CHAPTER  XXII. 

THE  SUPREME  BENCH  INVADED — ITS  DECISIONS  RE 
VIEWED,  .....  202-222 

CHAPTER  XXIII. 

BANK  MONOPOLISTS — THEIR  CONTROL  OF  THE  CUR- 

EINCY — A  BANKRUPT  FINANCIAL  POLICY,        .         223-230 

CHAPTER  XXIV. 

OUR  TARIFF  POLICY — DOES  u  PROTECTION  "  PROTECT  ?      231-289 

CHAPTER  XXV. 

PATENT  RIGHTS,  AND  THEIR  ABUSES,  .  .        240-246 


Vlll  TABLE    OF    CONTENTS. 

CONCLUSION. 

REFORMATION  OR  REVOLUTION — A  RADICAL  CHANGE 
DEMANDED  IN  THE  ADMINISTRATION  OF  PUBLIC 
AFFAIRS — CONCLUSIONS  OF  THE  AUTHOR, 


CHAPTER  I. 

LEGAL  TENDE'R  DECISIONS. 

CHAPTER  II. 
DISSENTING  OPINION  OF  CHIEF  JUSTICE  CHASE, 

CHAPTER  HI. 

DISSENTING  OPINION  OF  JUSTICE  CLIFFORD, 

CHAPTER  IV. 

DISSENTING  OPINION  OF  JUSTICE  FIELD, 

CHAPTER  Y. 
GOVERNMENT  CONTROL  OF  RAILROADS, 

CHAPTER  VI. 

THE  INFLUENCE  OF  MONOPOLIES  UPON  LABOR, 


247-326 


329 


330-345 


346-386 


885-430 


431-44b 


4Sf-460 


MONOPOLIES  AND  THE  PEOPLE. 


INTRODUCTORY  CHAPTER. 


IN  treating  of  the  topics  discussed  in  this  work,  the  author 
addresses  himself  to  the  task  with  no  partisan  bias.  Hio 
purpose  is  to  draw  aside  the  veil,  and  let  the  facts  speak 
for  themselves.  He  writes,  as 'he  believes,  in  the  performance 
of  duty.  Serious  dangers  are  threatening  the  people.  There 
is  a  power  in  the  land,  possessing  elements  destructive  not  only 
of  the  industrial  and  producing  public,  but  of  the  very  form 
and  spirit  of  republican  government.  It  will  be  the  aim  of  the 
author  to  show  forth  the  progress  and  present  attitude  of  this 
power  in  its  relations  with  the  people,  and  to  suggest,  if  not 
to  advotate,  such  measures  of  relief  and  protection  as  the  exi 
gency  demands. 

It  is  a  fact  to  be  admitted  by  every  candid  thinker,  that  of 
late  years,  corporations,  rings,  and  single  speculators  have,  by 


ERRATA. 

Page  12''),  third  line  from  tup,  tor  "Then"  read  Tf 

lob,  second  line  from  bottom,  for  "  Gould  Jay  "  read  Jay  Gould. 

202,  fourth  line  from  top,  for  "jealous"  read  zealous. 

238,  eleventh  line  from  top,  for  u  1802  "  read  1872. 

257,  second  line  from  bottom,  for  ;<  to  "  read  by. 

272,  fifteenth  line  from  bottom,  for  "  ultro  "  read  retro. 


TABLE    OF    CONTENTS. 

CONCLUSION 

REFORMATION  OR  REVOLUTION — A  RADICAL  CHANGE 
DEMANDED  IN  THE  ADMINISTRATION  OF  PUBLIC 
AFFAIRS — CONCLUSIONS  OF  THE  AUTHOR,  .  247-326 


CHAPTER  I. 
LEGAL  TENDE'R  DECISIONS.  .  .  .  329 

CHAPTER  II. 
DISSENTING  OPINION  OF  CHIEF  JUSTICE  CHASE,        .         330-345 

CHAPTER  HI. 
DISSENTING  OPINION  OF  JUSTICE  CLIFFORD,  .         346-386 

CHAPTER  IV. 

DISSENTING  OPINION  OF  JUSTICE  FIELD,       .  .         885-430 

CHAPTER  Y. 


.R3H  r    i 
/ 

o^\hX 


MONOPOLIES  AND  THE  PEOPLE. 


INTRODUCTORY  CHAPTER. 


IK  treating  of  the  topics  discussed  in  this  work,  the  author 
addresses  himself  to  the  task  with  no  partisan  bias.  Hi« 
purpose  is  to  draw  aside  the  veil,  and  let  the  facts  speak 
for  themselves.  He  writes,  as 'he  believes,  in  the  performance 
of  duty.  Serious  dangers  are  threatening  the  people.  There 
is  a  power  in  the  land,  possessing  elements  destructive  not  only 
of  the  industrial  and  producing  public,  but  of  the  very  form 
and  spirit  of  republican  government.  It  will  be  the  aim  of  the 
author  to  show  forth  the  progress  and  present  attitude  of  this 
power  in  its  relations  with  the  people,  and  to  suggest,  if  not 
to  advotate,  such  measures  of  relief  and  protection  as  the  exi 
gency  demands. 

It  is  a  fact  to  be  admitted  by  every  candid  thinker,  that  of 
late  years,  corporations,  rings,  and  single  speculators  have,  by 
united  and  persistent  efforts,  obtained  control  of  the  govern 
ment  ;  that  their  interests  are  guarded  and  protected  by  the 
legislative,  executive,  and  judicial  departments  of  the  govern 
ment,  both  state  and  national. 

The  men  who  are  thus  combined  in  opposition  to  the  people, 
do  not  belong  to  any  one  political  division ;  they  are  found  in 
all  parties ;  they  are  firmly  united  for  the  purpose  of  grasping 
power ;  of  controlling  the  government  in  their  own  interest ; 
of  fastening  upon  the  people  oppressive  monopolies,  and  of 
enriching  themselves  at  the  expense  of  the  public.  To  accom 
plish  these  ends  they  procure  donations  of  land,  money  sub 
sidies,  protective  tariffs,  continue  a  depreciated  currency,  and 


10  MONOPOLIES   AND   THE    PEOPLE. 

by  arbitrary  rules  and  by-laws  of  their  own,  hold  the  whole 
people  at  their  mercy.  To  such  an  extent  have  these  monop 
olies  been  fostered  and  protected,  that  at  the  present  time  the 
farmer  pays  in  freights,  taxes,  and  duties,  at  least  one-half  of 
his  farm  products  for  their  support. 

A  silent  or  passive  acquiescence  in,  and  submission  to,  these 
abuses  and  oppressions,  have  given  a  controlling  strength  and 
power  to  monopolies  that  cannot  now  be  overcome  without 
a  united,  long,  and  hard  struggle. 

These  evils  cannot  be  corrected,  nor  the  rights  of  the  peo 
ple  restored,  save  by  concerted  action  on  their  part,  not  only 
in  securing  proper  legislation,  but  in  asserting  and  main 
taining  in  their  business,  at  elections,  and  in  the  courts,  their 
rights  as  free  and  indeperidant  citizens  of  the  United  States. 
The  taxing  of  the  people  for  the  purpose  of  aiding  private 
enterprises,  the  donation  of  the  public  land,  or  of  the  public 
money,  to  individuals,  or  companies,  or  the  enactment  of  laws 
by  which  the  people  are  compelled  to  pay  a  part  of  their  hard- 
earned  substance  to  aid  private  parties  in  accumulating  wealth, 
are  oppressions  not  to  be  tolerated  in  a  republic.  Yet  it  is 
true  that  we  are  now  taxed  for  the  purpose  of  paying  the  in 
terest  on  many  millions  of  money  given  or  loaned  to  railroad 
corporations ;  that  we  pay  large  duties  on  goods  for  the  benefit 
of  wealthy  manufacturers ;  that  extortionate  rates  are  exacted 
for  transportation  of  products  to  market ;  that  we  are  taxed  to 
build  railroads  for  private  owners,  and  these  things  are  all 
pronounced  legal  and  constitutional,  not  because  they  are  so, 
but  because  these  private  interests  have  become  so  powerful 
that  they  control  the  country.  The  antiquated  idea  that  the 
government  was  instituted  by  the  people,  and  for  the  people, 
has  become  entirely  obsolete,  and  the  new  doctrine  has  ob 
tained  that  the  whole  duty  of  the  government  is  tojfoster,  pro 
tect,  and  support  monopolies,  and  that  these  monopolies  own 
the  people. 

In  no  country  of  the  civilized  world  are  the  people  more 
directly  connected  with  all  the  questions  affecting  their  well 
being,  than  they  are  in  the  United  States.  It  follows  that  all 
should  be  familiar  with  such  measures  as  tend  to  fix  and  es 
tablish  the  general  policy  of  the  government,  not  only  in  re- 


INTRODUCTORY   CHAPTER.  11 

spect  to  its  general  administration,  but  especially  in  those 
matters  that  directly  or  indirectly  give  to  corporations,  associ 
ations,  companies,  or  individuals,  exclusive  grants,  donations, 
or  privileges,  detrimental  to  the  interests  of  those  who  are  not 
of 'the  "  favored  few." 

A  republican  government  can  only  exist  when  it  is  con 
trolled  by  the  people,  and  administered  in  their  interest. 
When  special,  or  class  legislation,  for  the  benefit  of  certain 
limited  interests,  or  in  favor  of  certain  parties,  becomes  the 
rule  of  action  in  the  administration  of  either  the  state  or 
national  government,  accompanied  by  grants  of  land,  money, 
or  taxes,  to  be  returned  to  the  government  by  levies  made 
upon  the  people  without  their  consent,  that  government  ceases 
to  be  republican. 

In  our  country,  with  its  vast  extent  of  territory,  its  diverse 
interests,  and  variety  of  products,  and  manufactures,  it  is  but 
natural  for  different  localities  and  interests  to  ask  governmen 
tal  aid ;  nor  is  it  always  an  abuse  of  power  for  the  government 
to  give  this  aid.  In  some  instances  it  is  the  duty  of  the  gov- 
erment  to  use  its  power  and  the  public  money  in  matters  that 
in  some  des;r^e,  at  least,  are  in  their  nature  local ;  such,  for 
instance,  as  the  improvement  of  rivers,  harbors,  &c.  In  these 
cases  it  is  not  an  abuse  of  power,  but  a  legitimate  exercise  of 
the  delegated  authority  for  the  benefit  of  the  people. 

Bui  there  is  another  species  of  legislation,  approved  by  the 
executive  and  judicial  departments  of  the  general  government, 
and  endorsed  and  supported  by  the  legislatures  and  courts 
of  many  of  our  states,  that  is  in  its  operation  anti-r.epublican 
and  oppressive  to  the  people.  We  refer  to  the  current  special 
legislation  in  favor  of  railroad  corporations,  our  protective 
tariff,  and  the  banking  system,  and  financial  policy  of  the  gov 
ernment. 

No  one  will  accuse  the  author  of  indulging  in  a  partisan 
view  of  these  matters.  The  history  of  our  country  shows  that 
men  of  all  parties  have  sought  tor  and  obtained  special  grants 
and  privileges.  Our  aim  is  to  direct  the  attention  of  the 
reader  to  some  of  the  facts  connected  with,  and  resulting  from, 
special  legislation  on  the  above  named  subjects,  and  show  their 
effect  upon  the  people  generally. 


12  MONOPOLIES   AND   THE    PEOPLE. 

The  assertion  that  the  government  is  now  committed  to  the 
policy  of  donating  the  public  lands  to  railroad  corporations 
may  be  thought  untrue,  yet  if  we  look  through  the  acts  of 
congress  for  the  last  few  years  we  will  find  that  more  than  two 
hundred  million  acres  have  bee-n  donated  to  such  corporations, 
and  from  the  number  of  bills  asking  for  further  grants  intro 
duced  during  the  last  congress  these  donations  have  but  just 
begun.     It  will  not  be  claimed  that  the  people  asked  for  these 
grants,  or  that  the  necessities  of  the  government  demanded 
them.     Nor  will  it  be  contended  that  the  people  derive  any 
direct  benefit  from  them.     On  the  contrary,  the  lands  and  the 
roads  are  owned  and  controlled  by  private  corporations,  and 
not  even  the  government  can  use  these  roads  for  purposes  of 
transportation  without  compensation.     Now,  these  lands  do 
not  belong  to  the  government,  but  to  the  people.     Thos'e  per 
sons  filling  the  different  departments  of  government  are  but 
the  agents  or  servants  of  the  people,  and  have  no  more  right 
to  give  the  public  lands  to  railroad  corporations  than  to  tax 
the  people  and  donate  the  money  received  as  taxes  to  these 
companies.    The  policy  is  bad  and  oppressive  in  its  effects.    If 
one  owns  lands  and  employs  an  agent  to  sell  it  at  a  given  price 
per  acre,  this  agent  has  no  right  to  convey  one-half  of  it  to 
himself  and  friends,  and  mark  up  the  remaining  half  to  a 
double  price,  and  leave  it  on  the  owner's  hands.     This  is  what 
congress  has  done  with  the  public  lands,  and  in  every  instance 
the  grants  or  donations  have  been  made  to  aid  monopolies, 
corporations,  and  powerful  companies,  who  disregard  the  inter 
ests  of  the  public,  and  use  their  power  and  these  immense 
gifts  for  the  purpose  of  securing  further  grants  by  corrupting 
legislators,  judges,  and  executive  officers.     If  we   scale  their 
efforts  at  corruption  by  their  apparent  success,  they  have  not 
always  failed.     The  interests  of  these  monopolies  are  adverse 
to  those  of  the  people.     The  privileges  granted  them  are  taken 
from  the  people.     The  wealth  of  the  nation,  held  by  the  gov 
ernment  in  trust  for  the  people,  has  been  and  is  now  being 
misapplied  by  the  people's  trustees,  and  given  to  these  anti- 
republican  monopolies,  and  unless  something  is  done  to  arrest 
this  species  of  dishonest  and  unconstitutional  legislation,  it  is 
only  a  question  of  time,  and  that  time  not  distant,  when  this 


INTRODUCTORY    CHAPTER.  13 

government,  called  republican,  will  deny  to  the  common  peo 
ple  those  unalienable  rights  guaranteed  to  them  by  the  constitu 
tion.  How  is  it  now  ?  Discriminations  are  made  against  the 
public  in  favor  of  these  monopolies  in  payment  of  taxes,  in 
special  legislation  for  their  benefit,  and  the  aid  and  protection 
afforded  them  by  the  courts. 

Corporations  and  joint  stock  companies  should  have  such 
legislation  and  judicial  aid  afforded  them  as  is  necessary  to 
give  them  a  legal  being,  and  place  them  on  an  equal  plane 
with  individuals,  and  no  -more.  ^All  privileges,  immunities, 
and  favors  granted  to  them,  beyond  such  as  are  necessary  for 
the  above  enumerated  purposes,  are  in  conflict  with  the  spirit 
and  genius  of  our  government.  The  granting  of  exclusive 
privileges  to  individuals  or  companies  tends  to  build  up  an 
aristocracy  of  wealth,  to  array  capital  against  labor,  and  to 
divide  the  people  into  classes.  While  we  have  no  titled  aris 
tocracy  in  this  country,  under  the  fostering  care  of  the  gov 
ernment  an  aristocracy  of  wealth  has  sprung  up  among  us, 
more  despotic  in  its  nature  than  exists  in  the  old  world.  It 
holds  in  its  grasp  the  labor  of  the  country ;  it  compels  the 
whole  people  to  pay  tribute  to  it;  it  is  constantly  asking, 
claiming,  and  receiving  additional  strength  at  the  expense  of 
the  people.  So  great  has  its  power  become  throughout  the 
country  as  to  alarm  all  who  have  considered  the  subject.  For 
the  purpose  of  self-protection,  the  laboring  community 
throughont  the  country  are  banding  together  to  resist  this 
monopoly.  The  Patrons  of  Husbandry  are  moving  in  the 
same  direction,  all  feeling  assured  that  no  time  must  be  lost, 
and  that  the  welfare  of  the  country,^ the  perpetuity  of  our  free 
institutions,  and  the  privilege  of  owning  and  enjoying  the 
fruits  of  thrift  and  labor,  without  giving  at  least  one-half  of 
them  to  support  these  monopolies,  demand  prompt,  united,  and 
efficient  action. 

We  propose  discussing  the  different  matter  referred  to  in 
the  following  order: — 

I.     Donations  of  land  and  government  subsidies,  and  their 
effect  upon  the  people  and  the  country. 

n.     The  oppressions  practiced,  and  unjust  discriminations 


14  MONOPOLIES    AND    THE    PEOPLE. 

made  by  railroad  companies  in  the  transportation,  shipping, 
and  storage  of  freights. 

III.  The  unjust  system  of  taxation  and  discrimination  made 
by  legislatures  and  congress  in  favor  of  railroad  companies. 

IV.  The  financial  policy  of  the  government,  and  the  aid 
afforded  by  it  to  corporations  and  monopolies. 

Y.  The  tendency  of  the  courts  of  the  country  to  uphold 
special  or  class  legislation  in  favor  of  monopolies  and  corpora 
tions,  at  the  sacrifice  of  the  interests  and  rights  of  the  people. 

VI.  The  banking  system  of  the  country  with  its  useless 
burdens  imposed  upon  the  public. 

VII.  The  policy  of  protective  tariff,  and  its  effect  upon  the 
people  and  the  interests  of  the  country. 

VIII.  The  evils  incident  to  the  patent  laws  of  the  country. 

IX.  The  author  will  present  his  views  respecting  the  means 
to  be  used  for  redressing  the  grievances  considered  by  him. 

In  treating  of  these  different  subjects,  it  will  be  our  design 
to  cite  and  quote  such  acts  of  congress,  of  the  state  legislatures, 
and  decisions  of  the  courts  as  will  sustain  the  views  presented, 
in  order  that  the  reader  may  fully  understand  how  these  giant 
monopolies  are  in  fact  elided  and  supported  by 'the  government; 
and  we  shall  try  to  demonstrate  that  the  only  way  to  arrest 
and  correct  these  evils  is  by  united  and  persistent  action  on  the 
part  of  the  industrial  and  farming  communities,  and  that  the 
remedy  for  all  improper  legislation  for,  and  governmental  aid 
to,  these  monopolies  is  in  the  hands  and  under  the  control  of 
the  people. 


CHAPTER  I. 


A    PRELIMINARY    SURVEY. 

NOTHING  in  this  country  has  contributed  so  much  to  the 
subversion  of  our  republican  institutions  as  Land  Grants 
made  by  congress  to  railroad  corporations,  and  con 
gressional  legislation  in  their  favor.  The  policy  has  opened 
a  wide  field  for  reckless  speculation  and  corrupt  legislation. 
It  has  reversed  the  old  rule,  that  "the  people  are  sovereign," 
and  has  given  to  "the  favored  few"  the  absolute  control  of  the 
nation.  The  reckless  giving  of  lands  to  railroad  corporations, 
by  congress,  is  without  excuse,  or  even  apology.  When 
grants  were  first  made  to  states,  it  was  pretended  that  rail 
roads  could  not  be  built  without  this  aid.  Subsequent  devel 
opments  exploded  this  idea.  Take  Iowa  as  an  example :  In 
1856  four  leading  railroads  crossing  the  state  from  east  to  west, 
received  grants  of  lands  sufficient  to  pay  at  least  one-half  of 
the  entire  cost  of  their  construction  across  the  -state,  yet  they 
were  not  built  until  long  years  after  the  grants  were  made, 
nor  were  they  constructed  as  rapidly  as  roads  built  exclusively 
by  private  enterprise  and  private  capital.  The  effect  of  the 
grants  was  to  retard  the  settlement  and  development  of  the 
wealth  and  resources  of  the  state,  by  demanding  from  those 
who  wished  to  settle  upon  the  lands  so  granted,  an  extortion 
ate,  or  at  least  a  greatly  appreciated  price  therefor.  It  does 
not  require  a  great  stretch  of  the  imagination  to  arrive  at  the 
conclusion  that  but  for  these  grants  the  population  and  wealth 
of  Iowa  (the  taxable  wealth)  would  be  quite  one-fourth  greater 
now.  The  grant  of  lands  to  certain  railroad  companies  in 
Iowa  reach  eight  thousand  acres  per  mile;  this,  at  §1.25  per 
acre,  amounts  to  $10,000.  per  mile;  much  more  than  one-half 
of  the  actual  entire  cost  of  their  construction.  Yet,  as  a  mat 
ter-of-fact,  some,  if  not  all,  of  them  became  insolvent,  and 


16  MONOPOLIES   AND   THE    PEOPLE. 

either  before,  or  soon  after  their  completion,  their  roads  were 
sold  to  other  parties  —  the  original  companies  becoming 
bankrupt.  But  while  the  companies  became  bankrupt,  the 
officers  and  few  stockholders  who  controlled  the  corporation 
retired  with  immense  wealth.  These  are  the  men  who,  at  the 
inception  of  the  land  grant  system  of  building  railroads,  in 
augurated  the  theory  which  has  since  been  practiced,  that  all 
lands  thus  granted  were  to  be  treated  as  donations  to  the  men 
who  controlled  the  roads  receiving  the  grants.  The  result  has 
been  demoralizing.  It  has  opened  a  field  to  adventurers,  stock 
jobbers,  and  unscrupulous  men,  who  have  gone  to  the  national 
capital  and  organized  themselves  into  squads,  rings,  and  compa 
nies,  for  the  purpose  of  robbing  the  people.  Not  unfrequently 
the  men  elected  by  the  people  to  look  after  their  interests  in  con 
gress,  have  themselves  become  leaders  and  partners  in  these  raids 
upon  the  public  treasurer;  and  so  powerful  are  these  organi 
zations  that  all  the  departments  of  government  have  yielded  to 
them,  and  the  rule,  with  but  few  exceptions,  is,  to  plunder  the 
treasury  upon  all  occasions,  and  for  every  conceivable  object. 
But  as  these  matters  will  be  treated  in  detail  in  the  following 
pages,  we  dismiss  them  for  the  present. 

The  rule  has  been,  with  few  exceptions,  in  granting  lands, 
to  provide  that  the  railroad  company  shall  select  alternate  sec 
tions;  that  the  residue  shall  be  for  sale  at  $2.50  per  acre;  that 
it  shall  not  be  subject  to  settlement  under  the  pre-emption  or 
homestead  law.  By  these  provisions,  those  persons  who  enter 
the  remaining  alternate  sections,  pay  back  to  government  the 
value  of  the  lands  donated  to  the  railroad  company.  This 
plan  of  aiding  monopolies  is  at  variance  with  every  principal 
of  right  and  justice.  The  people  themselves  are  the  govern 
ing  power.  They^  are  the  government.  Those  who  fill  the 
various  offices  are  not  rulers,  but  agents  and  servants  of  the 
people.  The  public  lands  are  the  property  of  the  people,  and 
these  agents  or  servants  representing  them  in  congress  have 
no  more  right  to  give  these  lands  to  corporations  than  to  vote 
apart  of  each  citizen's  private  fortune  to  the  same  corporations. 
When,  in  addition  to  these  grants,  embracing  territory  eight 
or  ten  times  larger  than  the  state  of  Iowa,  large  subsidies  of 


A    PRELIMINARY   SURVEY.  17 

money  are  also  voted  to  accompany  the   lands,   the   people 
should  become  alarmed,  and,  if  possible,  arrest  such  abuses. 

Every  acre  of  land  given  to  railroad  companies  is  a  direct 
robbery  of  the  people,  and  the  fact  that  whenever  a  grant  is 
made  the  people  are  required  to  make  good  the  amount  taken 
from  them  by  paying  a  double  price  for  the  moiety  that  is  left 
to  them,  but  adds  insult  to  injury.  The  citizen  who  wishes  to 
live  upon  and  improve  his  quarter  section,  instead  of  claiming 
it  as  a  homestead,  or  even  purchasing  it  at  the  government 
price  of  $1.25  per  acre,  must  pay  $2.50  per  acre  before  he  will 
be  permitted  to  occupy  it.  Nor  is  this  all;  he  must  be  taxed 
to  pay  the  interest  on  the  subsidy  bonds  issued  to  the  same 
companies  that  have  received  the  grants  of  land,  and  all  the 
benefit  he  derives  from  these  unjust  burdens  imposed  upon 
him,  is  the  privilege  of  traveling  upon  railroads,  or  of  ship 
ping  his  produce  over  them,  after  he  has  paid  to  their  officers 
whatever  sum  they  choose  to  demand  for  the  privilege. 

To  show  more  fully  the  extent  to  which  the  people  are  be 
ing  plundered  under  the  plea  of  assisting  railroads  in  their 
efforts  to  develope  the  country,  we  desire  to  direct  the  reader's 
attention  to  some  of  the  acts  of  congress  covering  "  railroad 
legislation."  Let  us,  for  an  example,  take  the  Union  and 
Central  Pacific  railroad,  beginning  at  Council  Bluffs  and  ter 
minating  at  San  Francisco.  The  charter  for  this  road  was 
granted  in  1862,  at  a  time  when  the  country  was  at  war;  when 
it  would  be  natural  to  presume  that  the  government  had  no 
surplus  capital,  and  when  reason  and  common  prudence  de 
manded  strict  integrity  and  rigid  economy  in  every  depart 
ment.  In  chartering  the  company,  all  idea  of  economy,  integ 
rity,  or  even  common  honesty  seems  to  have  been  abondoned. 
The  demand  for  the  road  as  a  national  necessity  in  time  of 
war,  for  direct  communication  between  the  Atlantic  and  Pacif 
ic  states,  and  the  immense  cost  of  the  road,  with  its  great 
length,  were  the  arguments  used  in  favor  of  liberal  aid.  All 
these  reasons  were  plausible — perhaps  valid.  They  were  seized 
upon,  and  the  action  of  congress  besought  in  the  premises  by 
a  ring  that  was  formed  for  the  purpose  of  making  immense 
fortunes  out  of  the  enterprise.  A  noticeable  feature  in  the 
matter  is,  that  members  of  congress,  in  the  senate  and  house, 
2 


18  MONOPOLIES    AND   THE    PEOPLE. 

as  soon  as  the  act  was  passed  granting  the  charter,  became 
large  stockholders  and  managers  in  the  corporations.  The 
aid  granted  by  congress  to  this  company  was  sufficient,  if 
honestly  applied,  to  construct  a  double  track  road  the  entire 
distance,  and  leave  a  large  margin  for  distribution  among  the 
stockholders.  The  act  of  congress  granting  the  charter,  with 
subsequent  amendments,  opened  a  wide  field  for  plunder,  and 
the  way  the  corporators  availed  themselves  of  their  opportuni 
ty  shows  that  they  had  determined  to  plunder  the  people  of 
the  last  available  dollar.  A  reference  to  this  act  and  amend 
ments,  as  published  by  congress,  will  fully  sustain  all  we  have 
asserted.  Selecting  the  charter  of  this  road  as  an  apt  illustra 
tion  of  all  others  receiving  aid  from  government,  we  ask  the 
reader's  attention  to  some  of  its  more  remarkable  features. 


CHAPTER  II. 


THE  PACIFIC  RAILROAD  INIQUITY. 

ON  the  first  day  of  July,  A.  D.  1862,  the  charter  of  the  Union 
Pacific  railroad  was  passed.  It  contains,  among  others, 
the  following  provisions,  to- wit  :— 

"SECTION  2.  That  the  right  of  way  through  the  public 
lands  be,  and  the  same  is  hereby,  granted  to  said  company 
for  the  construction  of  said  railroad  and  telegraph  line,  and 
the  right,  power,  and  authority,  are  hereby  given  to  said  com 
pany  to  take  from  the  public  lands  adjacent  to  the  line  of  said 
road,  earth,  stone,  timber,  and  other  materials,  for  the  con 
struction  thereof.  Said  right  of  way  is  granted  to  said  railroad 
to  the  extent  of  two  hundred  feet  in  width  on  each  side  of 
said  railroad,  where  it  may  pass  over  the  public  lands,  includ 
ing,  all  necessary  grounds  for  stations,  buildings,  workshops, 
and  depots,  machine  shops,  switches,  side  tracks,  turn-tables, 
and  water  stations." 

The  right  of  way  was  reduced  to  one  hundred  feet  for  each 
side  of  the  railroad,  by  act  of  congress  of  July  2,  1864,  and 
the  right  to  take  material  for  the  construction  of  the  road  was 
limited  to  ten  miles  on  each  side  thereof,  by  the  same  act 
By  this  section  the  company  is  allowed  to  take  from  the  public 
lands  all  the  material  needed  in  the  construction  of  the  road ; 
to  strip  the  lands,  and  leave  them  naked  for  the  people.  The 
real  value  of  the  lands  is  given  to  the  company ;  the  refuse 
left  for  the  American  people. 

A  part  of  the  third  section  reads  as  follows  :— 

"  That  there  be,  and  is  hereby,  granted  to  the  said  company, 
for  the  purpose  of  aiding  in  the  construction  of  said  railroad 
and  telegraph  line,  and  to  secure  the  safe  and  speedy  transpor 
tation  of  the  mails,  troops,  munitions  of  war,  and  public  stores 
thereon,  every  alternate  section  of  land,  designated  by  odd 


20  MONOPOLIES   AND   THE    PEOPLE. 

numbers,  to  the  amount  of  five  alternate  sections  per  mile,  on 
each  side  of  said  road,  on  the  line  thereof,  and  within  the  lim 
its  of  ten  miles  on  each  side  of  said  road,  not  sold,  reserved, 
or  otherwise  disposed  of,  by  the  United  States,  and  to  which 
a  pre-emption  or  homestead  claim  may  not  have  attached  at 
the  time  the  line  of  said  road  is  definitely  fixed.  Provided, 
that  all  mineral  lands  shall  be  exempted  from  the  operation  of 
this  act ;  but  when  it  shall  contain  timber,  the  timber  is  hereby 
granted  to  said  company." 

By  the  act  of  congress  of  July  2,  1864,  this  act  was  so 
amended  as  to  grant  ten  alternate  sections  on  each  side  of  the 
road,  and  to  grant  to  the  company  the  iron  and  coal  found 
within  ten  miles  of  the  road.  The  reader  will  notice  the  rea 
sons  given  for  this  grant.  1st.  To  aid  in  the  construction  of 
the  road ;  a  legitimate  reason.  2d.  To  secure  the  safe  and 
speedy  transportation  of  the  mail,  troops,  munitions  of  war,  &c. 
Twenty  sections  of  land  per  mile  are  given  to  the  company 
for  the  purpose  of  securing  the  safe  and  speedy  transportation 
of  troops,  and  above  enumerated  articles.  It  has  been  said 
that  a  poor  reason  is  better  than  no  reason.  Of  all  poor  rea 
sons  given  for  an  act,  this  appears  to  be  one  of  the  weakest. 
The  reader  will  not  be  able  to  discover  its  force.  As  we  pro 
gress,  we  will  find  that  from  its  inception  this  Pacific  railroad 
charter,  and  amendments,  were  "  conceived  in  sin,  and  brought 
forth  in  iniquity;"  that,  in  its  provisions  and  grants,  it  pre 
sents  a  state  of  facts  which  stamps  the  whole  scheme  as  a  base 
fraud  upon  the  public,  planned  by  men  who  were  seeking  to 
enrich  themselves  at  the  expense  of  their  country ;  and  that 
congress,  either  from  inattention  to  the  interests  of  the  people, 
or  because  the  spoils  were  to  be  divided,  granted  the  company 
the  precise  charter  that  was  to  enable  it  to  plunder  the  public 
without  hindrance. 

That  we  may  not  be  regarded  as  treating  the  subject  cap 
tiously,  let  us  concede  that  the  reason  given  was  a  good  one, 
and  that  the  grant  of  lands  would  give  security  to  the  trans 
portation  of  the  mails ;  still  the  thought  presents  itself  that  a 
grant  of  lands  to  the  value  of  $15,500  per  mile  would  be 
ample  aid  for  the  people  to  give  to  this  company,  in  the  con 
struction  of  its  road.  It  is  not  a  government  work,  owned  by 


THE    PACIFIC   RAILROAD    INIQUITY.  21 

the  public,  operated  and  controlled  by  the  government.  It 
is  a  private  enterprise,  and  while  all  persons  see  the  neces 
sity  of  a  railroad  connection  between  the  Atlantic  and  Pacific 
states,  but  few  will  indorse  the  policy  of  the  government  giv 
ing  to  this  private  company  more  aid  in  lands  and  money  than 
the  entire  cost  of  the  road,  or  more  than  it  would  have  cost  if 
built  by  private  capital.  And  when  it  is  found  that  this  large 
grant  is  made  without  any  equivalent,  that  not  even  the  mails, 
troops,  or  munitions  of  war,  can  be  transported  over  the  road 
without  the  payment  of  just  such  rates  as  this  private  corpora 
tion  chooses  to  charge,  the  conclusion  is  inevitable  that  the 
good,  not  of  the  public,  but  of  the  corporation,  was  the  con 
trolling  motive  in  affording  it  aid  ;  that  the  untold  millions  of 
subsidy  bonds,  and  vast  tracts  of  land  wrongfully  taken  from 
the  public,  and  given  to  this  company,  was  but  placing  the 
interests  of  the  whole  people,  in  their  social  and  business  in 
tercourse  across  the  continent,  at  the  mercy  of  a  soulless  cor 
poration. 

The  donations  we  have  already  noticed  are  the  "  right  of 
way;"  the  right  to  take  all  building  material  within  ten  miles 
of  the  road,  and  the  grant  of  twenty  sections  of  land  per  mile. 
But  this  is  not  all.  Section  five  of  the  act  provides  :  "  That 
for  the  purposes  herein  mentioned,  the  secretary  of  the  treas 
ury  shall,  upon  the  certificate,  in  writing,  of  said  commission 
ers,  of  the  completion  and  equipment  of  forty  consecutive 
miles  of  said  railroad  and  telegraph  line,  in  accordance  with 
the  provisions  of  this  act,  issue  to  said  company  bonds  of  the 
United  States  of  one  thousand  dollars  each,  payable  in  thirty 
years  after  date,  bearing  six  per  centum  per  annum  interest 
(said  interest  payable  semi-annually)  which  interest  may  be 
paid  in  United  States  treasury  notes,  or  in  any  other  money 
or  currency  which  the  United  States  have,  or  shall,  declare 
lawful  money,  and  legal  tender,  to  the  amount  of  sixteen  of 
said  bonds  per  mile  ;  and  to  secure  the  repayment  to  the  Uni 
ted  States,  as  hereinafter  provided,  of  the  amount  of  said  bonds 
so  issued  and  delivered  to  said  company,  together  with  all  inter 
est  thereon  which  shall  have  been  paid  by  the  United  States, 
the  issue  of  said  bonds  and  delivery  to  the  company  shall  ipse 
facto  constitute  a  first  mortgage  on  the  whole  line  of  the  railroad 


22  MONOPOLIES   AND   THE    PEOPLE. 

and  telegraph,  together  with  the  rolling  stock,  fixtures,  and 
property  of  every  kind  and  description,  and  in  consideration  of 
which  said  bonds  may  have  been  issued."  As  we  shall  here 
after  see,  this  section  was  amended  by  act  of  July  2d,  1864,  so 
as  to  allow  the  company  to  issue  its  own  bonds  to  the  same 
amount  per  mile  issued  by  the  government,  and  to  subrogate 
the  government  bonds  to  those  issued  by  the  company,  thus 
making  the  bonds  issued  by  the  company  the  first  mortgage 
bonds. 

Section  six  provides  for  the  transmission  of  messages  by 
telegraph,  and  the  transportation  of  the  mails,  troops,  munitions 
of  war,  supplies,  and  public  stores  for  the  government,  giving 
it  the  preference  at  all  times,  "  at  fair  and  reasonable  rates  of 
compensation,  and  not  to  exceed  the  amount  paid  by  private 
parties  for  the  same  kind  of  service." 

Section  eleven  reads  as  follows  : — 

"  That  for  three  hundred  miles  of  said  road,  most  mountain 
ous  and  difficult  of  construction,  to-wit:  One  hundred  and 
fifty  miles  westwardly  from  the  eastern  base  of  the  Rocky 
mountains,  and  one  hundred  and  fifty  miles  eastwardly  from 
the  western  base  of  the  Sierra  Nevada  mountains,  said  points 
to  be  fixed  by  the  president  of  the  United  States,  the  bonds  to 
be  issued  in  aid  of  the  construction  thereof  shall  treble  the 
number  per  mile  hereinbefore  provided,  and  the  same  shall  be 
issued,  and  the  lands  herein  granted  be  set  apart,  upon  the 
construction  of  every  twenty  miles  thereof,  upon  certificate  of 
the  commissioners  as  aforesaid,  that  twenty  consecutive  miles 
of  the  same  are  completed ;  and  between  the  sections  last 
named,  of  one  hundred  and  fifty  miles  each,  the  bonds  to  be 
issued  to  aid  in  the  construction  thereof  shall  be  double  the 
number  per  mile  first  mentioned,  and  the  same  shall  be  issued, 
and  the  lands  herein  granted  be  set  apart,  upon  the  construc 
tion  of  every  twenty  miles  thereof,  upon  the  certificate  of  the 
commissioners  as  aforesaid,  that  twenty  consecutive  miles  of 
the  same  are  completed ;  provided  that  no  more  than  fifty 
thousand  of  said  bonds  shall  be  issued  under  this  act"  to  aid  in 
constructing  the  main  line  of  said  railroad  and  telegraph." 

This  vant  amount  of  bonds  was  issued  to  the  main  line  of 
the  road,  which,  as  will  be  seen  by  an  examination  of  the  first 


THE    PACIFIC    RAILROAD    INIQUITY.  23 

section  of  the  act,  terminates  at  the  western  boundary  of 
Nevada  territory.  This  company,  under  its  charter,  gets 
§50,000,000  in  bonds  ;  its  charter  does  not  authorize  it  to  con 
struct  the  whole  road  to  the  Pacific,  but  to  the  western  boun 
dary  of  Nevada,  where  it  meets  the  Central  Pacific  railroad, 
built  by  a  company  chartered  by  the  legislature  of  California. 
Fifty  millions  in  bonds,  with  the  privilege  of  subrogating  the 
security  for  their  payment  to  a  like  amount  issued  by  the  com 
pany  as  first  mortgage  bonds  on  the  road,  with  the  grant  of 
lands  above  named,  the  right  of  way,  and  the  right  to  all  build 
ing  material  within  ten  miles  of  the  line  of  the  road ;  this  is 
deemed  a  fair  provision  for  one  company.  In  order  that  no 
charge  of  selfishness,  or  want  of  charity,  should  be  brought 
against  congress,  it  next  turned  its  attention  to  other  com 
panies.  Perhaps  it  was  thought  promotive  of  the  interest  of 
this  corporate  power,  now  controlling  the  government,  that 
there  should  be  unity  of  action  and  purpose ;  that  its  strength 
should  be  so  great,  and  its  ramifications  so  extensive,  that 
neither  private  persons  nor  the  public  would  dare  to  resist  its 
demands.  The  necessity  for  a  railroad  from  the  Atlantic  to 
the  Pacific  states  was  not  the  only  consideration  influencing 
the  law-making  power  of  the  country.  This  fact  is  clearly 
apparent  from  the  provisions  of  the  charter,  for  numerous 
branch  or  spike  roads  are  included  in  the  charter,  and  provided 
for  in  the  land  grants  and  subsidy  bonds. 

Let  us  look  at  the  "  Central  Pacific  railroad  company,"  of 
California.  This  company  received  its  charter  from  that  state, 
was  duly  organized,  and  as  we  are  informed,  was  at  work 
on  its  road  when  the  charter  was  granted  by  congress  to  the 
"Union  Pacific."  But  congress,  not  to  show  partiality,  in  the 
ninths  ection  of  the  charter  of  the  Union  Pacific,  provides  for 
the  Central  Pacific  as  follows  : — 

"  The  Central  Pacific  railroad  company,  of  California,  a  cor 
poration  existing  under  the  laws  of  California,  is  hereby 
authorized  to  construct  a  railroad  and  telegraph  line  from  the 
Pacific  coast,  at  or  near  San  Francisco,  or  the  navigable  waters 
of  the  Sacramento  river,  to  the  eastern  boundary  of  California, 
upon  the  same  terms  and  conditions,  in  all  respects,  as  are 
contained  in  this  act  for  the  construction  of  said  railroad  and 


24  MONOPOLIES   AND   THE   PEOPLE. 

telegraph  line  first  mentioned,  and  to  meet  and  connect  with 
the  first  mentioned. railroad  and  telegraph  line  on  the  eastern 
boundary  of  California." 

Here  is  a  company  building  its  road  exclusively  in  a  single 
state,  under  a  charter  derived  from  a  state  having  the  exclu 
sive  control  of  its  own  affairs,  and  not  subject  to  the  legisla 
tion  of  congress,  or  the  administration  of  the  general  govern 
ment,  like  the  territories ;  yet  congress,  that  it  may  aid  a  great 
monopoly,  assumes  control  of  the  matter,  reaches  out  its  hand 
laden  with  the  people's  land,  and  the  people's  money,  and  says 
to  this  California  company :  "  If  you  will  unite  with  and  be 
come  a  part  of  this  giant  monopoly  we  are  creating  to  crush 
the  people,  and  will  accept  the  provisions  of  this  act  and  render 
fealty  to  the  general  government  as  the  l  higher  power,'  we 
will  give  you  twenty  sections  of  land,  and  subsidy  bonds  to 
the  amount  of  sixteen  thousand  dollars  per  mile,  with  the 
privilege  of  issuing  your  own  first  mortgage  bonds  for  an  ad 
ditional  sixteen  thousand  dollars  per  mile  for  every  mile  of 
road  you  build  in  the  state  of  California."  Of  course  this 
California  company  accepts  this  tempting  offer,  and  in  addi 
tion  to  the  fifty  thousand  of  subsidy  bonds  for  sixteen  thousand 
dollars  each  to  the  Union  Pacific,  an  additional  sixteen  thous 
and  dollars  per  mile  is  issued  to  the  Central  Pacific,  all  of 
which,  as  we  will  show,  principal  and  interest,  will  in  the  end 
come  out  of  the  pockets  of  the  people.  The  uniting  of  these 
two  companies,  and  the  completion  of  their  roads  and  tele 
graph  lines,  afforded  to  the  country  and  the  government  (pro 
vided  in  all  cases  they  paid  to  the  companies  the  amounts 
they  charged  therefor)  a  road  for  the  purpose  of  gravel,  and 
transportation  of  freights,  and  secured  a  "  safe  and  speedy  trans 
portation  of  the  mails,  troops,  munitions  of  war,  and  public  stores 
thereon,"  and  if  the  construction  of  the  road  was  aided  for  that 
purpose,  it  would  seem  to  have  been  accomplished,  and  as  a 
matter  of  justice  to  the  public,  no  further  burdens  should  have 
been  imposed  upon  the  public.  Two  companies  had  been  pro 
vided  for  at  the  people's  expense,  and  all  that  was  demanded 
for  the  prosecution  of  the  public  business  had  been  effected. 
But  there  was  danger  that  other  through  lines  of  railroad 
might  be  constructed  across  the  territories  that  might  become 


THE   PACIFIC   RAILROAD   INIQUITY.  25 

rivals  of  this  giant  monopoly.  The  Hannibal  &  St.  Joseph 
railroad  company  were  across  the  state  of  Missouri,  looking  to 
the  west.  The  Leavenworth,  Pawnee,  &  Western  company 
were  preparing  for  action.  A  road  was  crossing  Minnesota 
and  Iowa  to  strike  the  Missouri  river  at  Sioux  City.  Any  or 
all  of  these  roads  might  become  rivals.  To  prevent  such  a 
catastrophe,  and  to  retain  for  all  time  to  come  an  absolute  and 
exclusive  monopoly,  these  companies  must  be  absorbed,  or  at 
least  rendered  harmless.  To  assist  this  scheme,  congress  is 
called  upon  for  further  aid  from  the  public  lands  and  treasury. 
The  response  is  all  that  could  be  desired.  It  gave  the  final 
blow  to  competition,  and  left  the  people  powerless  in  the  grasp 
of  this,  the  greatest  monopoly  in  the  country.  A  monopoly 
created  by  the  servants  of  the  people,  and  enriched  with  spoils 
taken  from  the  people,  in  violation  of  every  principle  of  right 
and  justice,  had  been  created  by  act  of  Congress,  and  to  insure 
it  the  absolute  control  of  the  country,  anything  promising  com 
petition  must  be  absorbed.  To  accomplish  this  object,  the 
ssme  act,  section  nine,  provides :  "  That  the  Leavenworth, 
Pawnee,  &  Western  railroad  company,  of  Kansas,  is  hereby 
authorized  to  construct  a  railroad  and  telegraph  from  the  Mis 
souri  river,  at  the  mouth  of  the  Kansas  river,  on  the  south 
side,  so  as  to  connect  with  the  Pacific  railroad  of  Missouri  to 
the  aforesaid  point,  on  the  one-hundredth  meridian  of  longi 
tude  west  from  Greenwich,  as  herein  provided,  upon  the  same 
terms  and  conditions  in  all  respects  as  are  provided  in  this  act 
for  the  construction  of  the  railroad  and  telegraph  line  first 
mentioned,  and  to  meet  and  connect  with  the  same  at  the 
meridian  of  longitude  aforesaid;  and  in  case  the  general  line 
or  route  of  the  road  from  the  Missouri  river  to  the  Rocky 
mountains  should  be  so  located  as  to  require  a  departure 
northwardly  from  the  proposed  line  of  said  Kansas  railroad 
before  it  reaches  the  meridian  of  longitude  aforesaid,  the  loca 
tion  of  said  Kansas  road  shall  be  made  so  as  to  conform 
thereto  ;  and  said  railroad  through  Kansas  shall  be  so  located 
between  the  mouth  of  Kansas  river  as  aforesaid,  and  the  afore 
said  point,  on  the  hundredth  degree  of  longitude,  that  the 
several  railroads  from  Missouri  and  Iowa  herein  authorized  to 
connect  with  the  same  can  make  connection  within  the  limits 


26  MONOPOLIES    AND    THE    PEOPLE. 

prescribed  by  this  act,  provided  the  same  can  be  done  without 
deviating  from  the  general  direction  of  the  whole  line  to  the 
Pacific  coast." 

It  will  be  seen  that  one  of  the  rival  lines  is  given  a  premium 
of  lands  and  bonds  to  intersect  with  the  Union  Pacific  near 
the  east  end  thereof;  it  becomes,  for  a  consideration,  a  part  of 
this  great  monopoly,  and  abandons  all  idea  of  competition. 

Section  ten  provides  for  a  union  or  consolidation  of  the 
Union  Pacific,  the  Central  Pacific,  the  Leavenworth,  Pawnee, 
&  Western,  and  the  Hannibal  &  St.  Joseph  companies ;  and  sec 
tion  thirteen  provides  :  "  That  the  Hannibal  &  St.  Joseph  rail 
road  company,  of  Missouri,  may  extend  its  road  from  St.  Joseph, 
via  Atchison,  to  connect  and  unite  with  the  road  through  Kan 
sas,  upon  filing  its  assent  to  the  provisions  of  this  act,  upon  the 
same  terms  and  conditions  in  all  respects,  for  one  hundred 
miles  in  length  next  to  the  Missouri  river,  as  are  provided  in 
this  act  for  the  construction  of  the  railroad  and  telegraph  line 
first  mentioned,  and  may  for  this  purpose  use  any  railroad 
charter  which  has  been  or  may  be  granted  by  the  legislature 
of  Kansas."  The  section  also  provides  for  connecting  this 
road  with  the  main  line.  This  company  promised  to  be  a 
rival,  but  when  congress  is  appealed  to,  $1,600,000  in  subsidy 
bonds,  and  two  thousand  sections  of  land  are  given  it  as  its 
share  of  the  spoils,  provided  it  will  accept  this  trifle  as  an  in 
ducement  to  combine  its  interest  with  this  great  corporation. 
This  disposes  of  all  rivals  south  of  Omaha.  True  the  people 
have  paid  dearly  for  it.  They,  through  their  servants  in  con 
gress,  have  enriched  a  lot  of  unscrupulous  men,  banded 
together  for  the  purpose  of  plundering  the  public,  and  given 
to  these  corporations  the  power  to  oppress  the  people  for  all 
time  to  come  ;  but  as  it  affords  a  safe  means  of  transporting 
the  mails,  &c.,  for  a  consideration  which  the  people  must  pay 
as  the  services  are  rendered,  the  public  should  not  complain. 
Congress  thought  the  matter  so  important  as  to  require  the 
gift  of  vast  sums  of  the  public  moneys,  and  princely  donations 
out  of  the  public  domain,  and  as  our  legislators  acted  for  the 
people,  and  the  companies  have  built  their  roads,  the  public 
must  submit. 

But  there  was  danger  that  the  roads  crossing  Iowa  and  Min- 


THE    PACIFIC    RAILROAD    INIQUITY.  27 

nesota  might  compete  with  the  Union  Pacific.  Sioux  City 
was  an  objective  point  on  the  Missouri  river.  West  of  that 
city,  across  the  then  territory  of  Nebraska,  a  road  could  be 
constructed  at  comparatively  small  cost.  This  line  might  be 
come  a  rival,  and  it  also  must  be  absorbed.  To  effect  this  ob 
ject,  the  following  provision  was  made  a  part  of  the  fourteenth 
section  of  this  a'ct :  "  And  whenever  there  shall  be  a  line  of 
railroad  completed  through  Minnesota  or  Iowa  to  Sioux  City, 
then  the  said  Pacific  railroad  company  is  hereby  authorized 
and  required  to  construct  a  railroad  and  telegraph  line  from 
said  Sioux  City,  upon  the  most  direct  and  practicable  route,  to 
a  point  on,  and  so  as  to  connect  with,  the  branch  railroad  and 
telegraph  line  in  this  section  hereinbefore  mentioned,  or  with 
the  said  Union  Pacific  railroad,  said  point  of  junction  to  be 
fixed  by  the  president  of  the  United  States,  not  farther  west 
than  the  one-hundredth  meridian  of  longitude  aforesaid,  and 
on  the  same  terms  and  conditions  as  provided  in  this  act  for 
the  construction  of  the  Union  Pacific  railroad,  as  aforesaid,  to 
complete  the  same  at  the  rate  of  one  hundred  miles  per  year." 
The  amendment  made  to  this  part  of  the  act  in  1864,  to  which 
we  shall  refer  in  another  chapter,  materially  changes  its  pro 
visions  ;  and  as  we  examine  these  provisions,  we  will  discover 
that  all  the  unjust  donations  made  of  the  public  lands  and 
moneys  are  exceeded  in  this  amendment. 

Now,  if  the  reader  will  take  a  map  on  which  the  railroads 
are  marked,  he  will  discover  that  from  Leavenworth  to  Sioux 
City  all  the  railroads  running  west  are  concentrated  into  one 
line,  after  leaving  the  one-hundredth  degree-of  longitude — the 
Burlington  &  Missouri  railroad  company  being  made  by  the 
act  of  1864  a  part  of  the  same  great  monopoly.  By  the  exclu 
sive  franchises  and  imperial  wealth  conferred  upon  it  by  con 
gress,  this  great  corporation  is  given  control,  absolute  control 
of  the  business  interests  of  the  great  west.  This  grand  system 
of  railroads  looks  well  on  the  map,  and  lends  color  to  the  plea 
that  the  wants  of  the  public  and  of  the  government  justified 
this  large  outlay  of  money  and  lands ;  but  an  inspection  of  the 
act  chartering  the  companies,  consolidating  them,  and  by  law 
giving  them  unlimited  control  of  the  interests  of  the  pubUc, 
will  convince  the  impartial  reader  that  the  interests  of  the  com- 


28  MONOPOLIES   AND   THE    PEOPLE. 

panics,  rather  than  the  needs  of  the  government,  or  the  wel 
fare  of  the  people,  controlled  the  action  of  congress. 

Grants  of  lands  and  exclusive  privileges  have  been  made  to 
other  corporations,  as  also  to  states,  for  the  purpose  of  aiding 
in  the  construction  of  railroads ;  but  our  aim  being  to  combat 
the  policy  itself,  as  involving  gross  injustice  and  oppression, 
and  to  show  its  effects  upon  the  public,  we  have  selected  the 
Union  Pacific  and  its  branches  as  the  best  illustration  of  the 
action  of  congress  in  making  these  grants,  and  the  companies 
owning  this  road  and  its  branches  as  a  fair  sample  of  the  class 
of  professed  benefactors  of  the  people. 


CHAPTER  HI. 


THE  MONOPOLISTS 


Pacific  companies  are  such  a  deep  mine  of  iniquity, 
we  must  sink  our  shaft  somewhat  deeper  if  we  would 
-*•  see  the  true  quality  of  the  corruption.  In  order  to  fully 
comprehend  the  injustice  done  to  the  people,  it  will  be  neces 
sary  to  examine  the  further  legislation  of  congress  in  their 
favor. 

A  perusal  of  the  act  from  which  we  have  quoted  will  con 
vince  the  reader  that  these  companies  received  all  that  was 
necessary  for  the  successful  completion  and  operation  of  their 
road,  and  its  numerous  branches,  and  to  enable  them  to  extort 
from  the  government  and  the  people  all  that  the  most  grasp 
ing  and  avaricious  could  desire.  But,  like  Oliver  Twist,  they 
still  asked  "for  more,"  and  they  got  it  ;  not  in  more  lands  and 
money,  but  in  being  relieved,  by  act  of  congress,  from  the 
restrictions  and  duties  imposed  upon  them  by  their  charter. 

The  act  of  congress  chartering  the  Union  Pacific  railroad, 
and  its  numerous  branches,  was  amended  by  the  act  of  July 
2,  1864,  in  many  particulars,  to  some  of  which  we  have  already 
referred.  The  fourth  section  amends  the  third  section  of  the 
original  charter  by  increasing  the  number  of  sections  of  land 
granted  per  mile  to  said  road,  from  ten  to  twenty,  and  allow 
ing  the  selection  of  the  lands  to  be  made  within  twenty  miles 
of  the  line  of  the  road,  instead  of  ten,  as  provided  in  the  orig 
inal  charter  ;  and  also  provides  that  the  secretary  of  the  inte 
rior  shall  withdraw  from  sale  and  pre-emption  all  the  land 
within  twenty-five  miles  of  the  line  of  the  road,  until  the  com 
pany  has  selected  its  twenty  sections.  The  original  charter 
limited  the  withdrawal  to  fifteen  miles.  The  amendment  also 
qualified  the  term  "  mineral  lands,"  contained  in  the  original 
act,  so  as  to  except  from  the  lands  reserved  by  the  government 


30  MONOPOLIES   AND    THE    PEOPLE. 

all  coal  and  iron  lands ;  thus  enabling  the  company  to  select 
coal  and  iron  lands  to  the  full  amount  of  twenty  sections  per 
mile,  giving  to  said  railroad  company,  or  companies,  a  monop 
oly  of  the  coal  trade  in  a  country  where  coal  is,  and  will  con 
tinue  to  be,  the  greatest  desideratum ;  and  the  same  section 
gives  the  company  the  right  to  use,  in  fact  grants  to  the  com 
pany,  all  the  timber  found  on  each  side  of  the  road  within  ten 
miles  thereof.  The  company  can,  under  its  charter,  take  all 
the  timber  from  the  land  it  does  not  select,  and  then  take  its 
twenty  sections  in  coal  lands,  when  they  can  be  found.  This 
it  has  done,  and  in  addition,  bought  of  the  government  other 
large  tracts  of  coal  land ;  not  in  the  name  of  the  company, 
perhaps,  but  in  the  name  of  the  individual  stockholders.  By 
this  means,  all  who  settle  along  the  line,  in  the  vicinity  of  this 
Union  Pacific  road,  are  placed  in  the  power  of  this  great  cor 
poration,  and  must  pay  it  for  fuel  and  transportation  whatever 
sum  may  be  demanded,  because  the  charter  does  not  restrict 
the  company  in  the  matter  of  charges  for  transportation. 

Section  seventeen  of  the  original  charter  provided  that 
twenty-five  per  centum  of  the  subsidy  bonds  should  be  re 
tained  by  the  government  until  the  entire  line  of  the  road  was 
completed.  Section  seven,  of  the  act  of  July  2, 1864,  repealed 
this  provision. 

Other  amendments  are  made  for  the  benefit  of  the  corpora 
tion,  as  to  time  and  manner  of  payment ;  but  as  it  is  not  our 
intention  to  examine  all  of  its  provisions  in  detail,  we  pass  to 
the  tenth  section. 

By  the  original  charter,  the  subsidy  bonds  issued  to  the 
company  were  to  be  and  remain  first  mortgage  bonds  upon 
the  road  and  property  of  the  company,  the  company  paying 
six  per  cent  interest  (payable  semi-annually)  on  said  bonds, 
and  the  principal  in  thirty  years.  The  tenth  section  of  the 
amendment  reads  as  follows  : — 

"  That  section  five  of  said  act  be  so  modified  and  amended 
that  the  Union  Pacific  railroad  company,  the  Central  Pacific 
railroad  company,  and  any  other  companies  authorized  to  par 
ticipate  in  the  construction  of  said  road,  may,  on  the  comple 
tion  of  each  section  of  said  road,  as  provided  in  this  act,  and 
the  act  to  which  this  act  is  an  amendment,  issue  their  first 


THE   MONOPOLISTS   "HELP   THEMSELVES."  81 

mortgage  bonds  on  their  respective  railroad  and  telegraph 
lines,  to  an  amount  not  exceeding  the  bonds  of  the  United 
States,  and  of  even  tenor,  time  of  maturity,  rate  and  character 
of  interest,  with  the  bonds  authorized  to  be  issued  to  said  rail 
road  companies,  respectively.  And  the  lien  of  the  United 
States  bonds  shall  be  subordinate  to  that  of  the  bonds  of  any 
or  either  of  said  companies,  hereby  authorized  to  be  issued  on 
their  respective  roads,  property,  and  equipments,  except  as  to 
the  sixth  section  of  said  act,  to  which  this  is  an  amendment, 
relating  to  the  transmission  of  dispatches,  and  the  transporta 
tion  of  mails,  troops,  munitions  of  war,  supplies,  and  public 
stores,  for  the  United  States." 

By  this  amendment,  the  public  money  appropriated  to  pri 
vate  corporations,  to  the  amount  of  about  $65,000,000,  for 
which  security  had  been  taken,  on  all  the  property  of  the 
companies,  was  left  in  the  hands  of  the  companies  without 
any  security ;  or,  in  other  words,  the  servants  of  the  people 
made  an  absolute  gift  of  this  great  sum  of  money.  The  his 
tory  of  the  country,  in  connection  with  railroad  corporations, 
demonstrates  the  fact  that  these  corporations  by  "  watering  " 
their  stock,  and  other  characteristic  management,  show,  if 
they  so  desire  it,  no  margin  from  the  business  of  their  roads. 
They  permit  the  interest  on  their  bonds  to  accumulate,  until  a 
foreclosure  and  sale  on  first  mortgage  bonds  are  necessary,  and 
then,  under  a  new  name,  but  with  the  same  persons  as  stock 
holders,  the  road  is  bought  in  and  becomes  profitable.  In  this 
case  the  amount  of  $65,000,000,  and  the  accrued  interest  must 
be  first  paid,  or  the  property  of  the  corporation  must  be  sold, 
and  the  public  money  advanced  by  the  government  will  be 
lost.  Even  at  the  present  time  (as  we  shall  show  hereafter) 
the  people  are  paying  the  interest  on  these  subsidy  bonds,  and 
the  only  security  they  have  for  its  repayment  is  the  honor  of 
the  company ;  for  all  precedents  prove  that  as  a  rule  second 
mortgage  bonds,  when  a  large  sum  of  first  mortgage  bonds  is 
to  be  paid,  are  of  no  real  value. 

Sections  fifteen  and  sixteen  provide  for  a  division  of  earn 
ings,  and  a  consolidation  of  the  various  companies.  Sections 
eighteen,  nineteen,  and  twenty,  provide  for  the  admission  of 
the  Burlington  &  Missouri  river  railroad  company  as  a  branch 


OZ  MONOPOLIES   AND   THE    PEOPLE. 

of  the  Union  Pacific,  with  a  grant  of  land  in  Nebraska.  But 
the  greatest  outrage  upon  the  rights  and  interests  of  the  peo 
ple,  in  this  Pacific  railroad  law,  will  be  found  in  the  seven 
teenth  section  of  this  amendment.  By  the  original  act,  the 
Union  Pacific  company  was  required  to  construct  a  branch, 
road  from  Sioux  City  (on  the  most  direct  and  practicable 
route)  to  some  point  on  its  road  to  be  fixed  by  the  president 
of  the  United  States  (but  not  beyond  the  one-hundredth  par 
allel)  when  a  railroad  should  be  constructed  through  Minnesota 
or  Iowa  to  Sioux  City.  This  new  road  was  to  unite  with  and 
form  a  part  of  the  great  monopoly,  and  was  to  receive  the 
same  amount  of  lands,  and  subsidy  bonds,  per  mile,  as  the 
main  line  received.  The  building  of  this  road  from  Sioux 
City  west,  to  a  proper  point  of  connection  with  the  main  line, 
would  have  cost  but  little,  comparatively,  because  of  the  favor 
able  character  of  the  country  through  which  it  would  pass. 

For  some  reason,  unknown  to  the  public,  it  was  decided  to 
make  a  change  in  respect  to  this  branch,  not  only  as  to  its 
location,  but  also  as  to  the  company  whose  duty  it  should  be  to 
build  it.  To  effect  this  object,  this  seventeenth  section  con 
tains  the  following  provisions  : — 

"  That  so  much  of  section  fourteen  of  said  act  as  relates  to 
a  branch  from  Sioux  City,  be,  and  the  same  is  hereby,  amended 
so  as  to  read  as  follows :  That  whenever  a  line  of  railroad 
shall  be  completed  through  the  state  of  Iowa,  or  Minnesota,  to 
Sioux  City,  such  company  now  organized,  or  as  may  be  here 
after  organized,  under  the  laws  of  Iowa,  Minnesota,  Dakota, 
or  Nebraska,  as  the  president  of  the  United  States,  by  its  re 
quest,  may  designate,  or  approve  for  the  purpose,  shall  con 
struct  and  operate  a  line  of  railroad  and  telegraph  from  Sioux 
City,  upon  the  most  direct  and  practicable  route  to  such  point 
on,  and  so  as  to  connect  with,  the  Iowa  branch  of  the  Union 
Pacific  railroad,  as  such  company  may  select,  and  on  the  same 
terms  and  conditions  as  are  provided  in  this  act,  and  the  act 
to  which  this  is  an  amendment,  for  the  construction  of  said 
Union  Pacific  railroad  and  telegraph  line,  and  branches;  and 
said  company  shall  complete  the  same  at  the  rate  of  fifty  miles 
per  year.  Provided,  that  said  Union  Pacific  railroad  company 
shall  be,  and  is  hereby,  released  from  the  construction  of  said 


THE    MONOPOLISTS   "HELP   THEMSELVES/7  33 

branch.  And  said  company  constructing  said  branch  shall 
not  be  entitled  to  receive,  in  bonds,  an  amount  larger  than  the 
said  Union  Pacific  railroad  company  would  be  entitled  to  re 
ceive  if  it  had  constructed  the  branch  under  this  act,  and  the 
act  to  which  this  is  an  amendment ;  but  said  company  shall 
be  entitled  to  receive  alternate  sections  of  land  for  ten  miles 
in  width  on  each  side  of  the  same,  along  the  whole  length  of 
said  branch;  and  provided  further,  that  if  a  railroad  shall  not 
be  completed  to  Sioux  City,  across  Iowa  or  Minnesota,  within 
eighteen  months  from  the  date  of  this  act,  then  said  company 
designated  by  the  president  as  aforesaid,  may  commence  and 
complete  the  construction  of  said  branch,  as  contemplated  by 
the  provisions  of  this  act.  Provided,  however,  that  if  the 
company  so  designated  by  the  president  as  aforesaid,  shall  not 
complete  the  said  branch  from  Sioux  City  to  the  Pacific  rail 
road  within  ten  years  from  the  passage  of  this  act,  then,  and 
in  that  case,  all  of  the  railroad  that  shall  have  been  constructed 
by  said  company,  shall  be  forfeited  to,  and  become  the  property 
of,  the  United  States." 

Now  if  the  reader  will  take  a  late  map,  having  the  lines  of 
railroads  upon  it,  he  will  discover  that  a  road  from  Sioux  City 
to  Columbus,  in  Nebraska,  would  be  about  one  hundred  miles 
in  length,  on  a  line  running  nearly  west ;  and  at  this  latter 
point  it  would  intersect  and  unite  with  the  Iowa  branch  of  the 
Union  Pacific ;  or  a  line  running  southwest  for  a  less  distance 
would  unite  with  the  Union  Pacific  at  Fremont,  in  Nebraska. 
In  the  original  charter  it  was  contemplated  to  occupy  one  of 
these  lines,  and,  in  fact,  a  branch  road  was  commenced  from 
Sioux  City  to  Fremont.  The  directors  of  this  branch  and  the 
Union  Pacific  are  in  part  the  same,  to-wit :  Oakes  Ames,  of 
Boston,  and  G.  M.  Dodge,  of  Iowa.  It  would  seem  that  this 
road,  running  southwest  to  Fremont,  and  there  uniting  with 
the  Pacific,  would  afford  all  necessary  facilities  for  securing 
the  transportation  of  the  mails,  troop?,  &c.,  and  that  upon  no 
pretext  whatever  could  another  grant  of  land  and  subsidy 
bonds  be  asked.  Yet  congress  thought  otherwise,  and  in  the 
section  last  quoted  authorized  any  company  organized  under 
the  laws  of  Iowa,  Minnesota,  Dakota,  or  Nebraska,  that  might 
be  designated  by  the  president  of  the  United  States,  on  appli- 
4 


84  MONOPOLIES  AND  THE  PEOPLE. 

cation  to  him  for  that  purpose,  to  construct  a  railroad  to  unite 
with  the  Union  Pacific,  leaving  it  with  the  new  company  to 
fix  the  point  at  which  it  would  so  unite,  but  requiring  it  to 
commence  at  Sioux  City.  Taking  advantage  of  this  act,  two 
companies,  the  Sioux  City  &  Missouri  Valley,  and  the  Chicago 
&  Northwestern,  constructed  a  line  of  road  from  Sioux  City  to 
Council  Bluffs,  there  to  unite  with  the  Pacific ;  the  Sioux  City 
&  Missouri  Valley  constructing  the  road  from  Sioux  City  to 
Missouri  Valley,  and  the  Chicago  &  Northwestern  from  Mis 
souri  Valley  to  Council  Bluffs.  This  line  of  road  was  con 
structed  ostensibly  as  a  part  of  the  Pacific  road.  It  is  pre 
sumed  to  run  west.  Look  at  the  map  and  you  will  see  that 
from  Sioux  City  to  Council  Bluffs,  instead  of  going  west,  it 
runs  on  a  line  east  of  south,  to  the  extent  of  thirty  miles, 
Council  Bluffs  being  thirty  miles  east  of  Sioux  City.  The 
company  constructing  this  last  named  road  received  from  the 
government  a  grant  of  one  hundred  sections  of  land  per  each 
mile,  and  $16,000  in  subsidy  bonds  for  each  mile  of  road. 
This  road  runs  along  the  east  side  of  the  Missouri  river,  and 
in  truth,  is  of  no  use  as  a  route  for  the  transportation  of  mails, 
troops,  &c.,  unless  the  government  prefers  to  use  the  longest, 
least  expeditious,  and  most  expensive  line  of  road.  Indeed,  it 
seems  to  be  a  road  that  is  under  the  especial  care  and  protec 
tion  of  congress.  It  is  called  in  the  Railroad  Manual,  "  The 
Sioux  City  &  Pacific  Railroad."  It  was  a  "  nice  and  fat "  job. 
It  has  one  feature  not  often  found  in  these  railroad  jobs  carried 
through  congress.  It  appears  to  have  been  gotten  up  for  the 
benefit  of  congressmen.  After  repeated  efforts  to  learn  who 
were  the  incorporators  of  this  company,  we  addressed  a  letter 
to  the  secretary  of  state  of  Iowa,  and  received  the  following 
answer  :— 

DBS  MOINES,  December  7,  1872. 

DEAR  SIR: — In  answer  to  yours  of  the  6th  inst.,  I  will  say 
that  there  is  no  line  of  railroad  from  Sioux  City  to  Council 
Bluffs,  run  as  one  road,  or  by  one  company.  The  Sioux  City 
and  Pacific  railroad  runs  from  Sioux  City  to  Missouri  Valley, 
and  the  Chicago  and  Northwestern  (Cedar  Rapids  and  Mis 
souri  River)  from  Missouri  Valley  to  Council  Bluffs.  The 
corporators  of  the  Sioux  City  and  Pacific  company  were  L.  B. 


THE    MONOPOLISTS    "HELP   THEMSELVES."  35 

Crocker,  M.  K  Jessup,  James  F.  Wilson,  A.  W.  Hubbard, 
Chas.  A.  Lombard,  Frank  Schuchardt,  W.  B.  Allison,  and 
John  I.  Blair.  Yours  truly, 

ED.  WRIGHT, 
Secretary  of  State. 

Among  the  present  directors  are  to  be  found  the  names  of 
Oakes  Ames,  John  I.  Blair,  D.  0.  Blair,  and  G.  M.  Dodge, 
Ames  was  a  member  of  the  late  congress,  and  G.  M.  Dodge 
is  an  ex-member.  Among  the  directors  of  the  Cedar  Rapids 
&  Missouri  river  company  appear  the  names  of  John  B.  Alley, 
and  James  F.  Wilson,  who  were  members  of  congress  when 
the  act  of  July,  1864,  was  passed,  amending  the  charter  of  the 
Union  Pacific,  and  making  the  large  grants  to  the  company 
designated  by  the  president  to  build  the  Sioux  City  branch  of 
the  Union  Pacific  railroad.  Wm.  B.  Allison  has  been  a  mem 
ber  of  congress  almost  continuously  from  1860  to  the  present 
time. 

This  Sioux  City  branch  seems  to  have  been  a  special  favor 
ite  with  certain  congressmen.  It  received  the  lion's  share  of 
lands,  getting  five  times  as  many  sections  per  mile  as  the  main 
lines,  and  this,  too,  for  the  purpose  of  building  a  railroad  run 
ning  east  of  south,  instead  of  west — the  direction  of  the  main 
line — following  the  course  of  the  Missouri  river  on  the  east 
side  thereof  for  the  entire  length  of  this  branch,  and  crossing 
on  the  bridge  to  the  Nebraska  shore  at  Omaha. 

In  addition  to  the  road  from  Sioux  City  to  Omaha,  and  for 
the  purpose  of  getting  all  the  land  and  money  possible  out  of 
the  government,  the  conspirators  organized  another  company, 
under  the  laws  of  Nebraska,  to-wit :  The  Fremont,  Elkhorn, 
&  Missouri  Valley  company,  and  built  a  road  running  from 
Missouri  Valley  to  Fremont,  in  Nebraska — about  fifty  miles, 
— and  these  two  roads,  from  Sioux  City  to  Missouri  Valley,  and 
from  Missouri  Valley  to  Fremont,  are  now  called  the  Sioux 
City  &  Pacific.  We  do  not  know  who  were  the  incorporators 
of  the  Fremont,  Elkhorn,  &  Missouri  Valley  company,  but  we 
find  among  the  present  directors,  John  I.  Blair,  D.  C.  Blair, 
and  ex-congressman  John  B.  Alley.  The  two  companies  are 
consolidated.  The  grant  of  one  hundred  sections  of  land,  and 
bonds  to  the  amount  of  $16,000  per  mile,  with  the  privilege  of 


36  MONOPOLIES    AND    THE    PEOPLE. 

issuing  first  mortgage  bonds  to  the  amount  of  $16,000  per 
mile,  altogether  comprise  one  of  the  most  remunerative  jobs 
ever  conceived  and  consummated  by  incorporating,  stockhold 
ing  and  "  direct  "-ing  congressmen  in  the  companies  receiving 
the  aid.  When  it  is  remembered  that  the  actual  cost  of  the 
construction  of  the  road  was  less  than  $30,000  per  mile  (as 
shown  by  the  Railroad  Manual),  and  that  it  is  of  no  value  to 
the  government  because  of  its  course,  save  for  carrying  local 
mails  (its  entire  earnings  for  government  transportation  being 
less  than  $1,000  per  annum),  it  will  not  be  uncharitable  to  con 
clude  that  this  fat  little  slice  of  theJPacific  railroad  job  was 
put  through  congress,  and  nursed  and  petted  by  government 
for  the  exclusive  benefit  of  congressmen,  their  friends  and 
relatives. 

We  do  not  deny  the  right  to  congressmen  to  become  and  re 
main  stockholders  and  directors  in  railroad  corporations,  but 
we  do  deny  their  right  to  vote  lands  and  money  to  companies 
in  which  they  are  stockholders  and  directors.  They  are  elected 
to  represent  the  people,  to  attend  to  and  protect  the  public  in 
terests.  When  they  form  themselves  into  companies  arid  vote 
the  lands  and  moneys  of  the  people  to  themselves,  they  violate 
their  trust,  and  instead  of  protecting  the  people,  plunder  them, 
and  divide  the  spoils.  To  give  these  unjust  practices  some 
color  of  right,  or  in  some  manner  to  excuse  themselves  for 
thus  appropriating  the  wealth  of  the  country  and  dividing  it 
with  their  friends,  they  assert  in  the  laws  thus  enacted  that  it 
is  done  to  aid  in  the  construction  of  railroads,  and  "  to  secure 
the  safe  and  speedy  transmission  of  the  mails,  troops,  muni 
tions  of  war,  and  government  supplies,"  &c.  It  is  no  part  of 
the  duties  of  congressmen  to  construct  railroads,  nor  are  the 
people  under  obligations  to  furnish  them  the  means  for  that 
purpose.  When  members  of  congress  form  themselves  into 
private  companies,  and  to  procure  the  means  for  prosecuting 
their  private  enterprises,  agree  to  divide  among  themselves  a 
part  of  the  money  and  property  belonging  to  the  public,  be 
cause  the  position  they  occupy  enables  them  to  do  so,  they 
manifest  the  same  disregard  for  the  rights  of  others,  and  the 
same  disregard  of  law  that  is  shown  by  the  class  of  men  who 
follow  theft  and  robbery  for  a  livelihood. 


THE    MONOPOLISTS   "HELP   THEMSELVES."  37 

But  let  us  follow  still  further  the  course  of  this  Pacific  rail 
road  company.  It  would  occupy  too  much  space,  and  weary 
the  reader  were  we  to  state  in  detail  all  the  acts  of  congress 
passed  in  aid  of  this  gigantic  combination.  In  speaking  of  the 
Pacific  railroad  we  are  apt  to  look  upon  it  as  simply  a  line  of 
road  extending  from  the  Missouri  river  to  the  Pacific  ocean ; 
to  consider  its  great  length;  the  character  of  the  country 
through  which  it  passes  ;  the  sparse  settlements;  the  necessity 
for  direct"  and  speedy  communication  between  the  Atlantic  and 
Pacific  states,  and  we  yield  a  ready  assent  to  the  action  of 
congress  in  voting  lands  and  subsidy  bonds  for  its  construc 
tion.  But  when  we  find  that  the  charters  of  the  Union  Pacific 
and  Central  Pacific  companies,  and  their  various  amendments, 
together  with  the  several  acts  of  congress  making  many  other 
companies  branches  of  the  Pacific  road,  virtually  consolidates 
all  the  railroads  between  the  cities  of  St.  Louis  and  St.  Paul 
on  the  Mississipbi  river,  and  all  the  railroads  running  west 
from  Chicago,  into  one  vast  corporation,  uniting  all  in  one 
track  from  Fort  Kearney  to  the  Pacific  ocean,  the  people  will 
begin  to  realize  that  while  they  thought  congress  was  appro 
priating  lands  and  moneys  solely  for  the  purpose  of  opening  a 
highway  across  the  territories,  it  was  in  fact  aiding  a  combina 
tion  of  men  and  corporations  in  their  attempt  to  control  the 
commerce  of  the  great  west ;  and  when  we  further  learn  that 
this  great  railroad  interest  is  already  virtually  consolidated,  and 
that  the  whole  people  are  placed  at  the  mercy  of  this  great 
monopoly,  we  see  at  a  glance  the  extent  of  the  power  vested 
in  it  by  act  of  congress. 

Among  the  railroad  companies  that  are  included  in  this  com 
bination  are  the  following:  Chicago  &  Northwestern;  Iowa 
Falls  &  Sioux  City ;  Cedar  Rapids  &  Missouri  River ;  Leaven- 
worth,  Atchinson,  &  Northwestern;  Kansas  Pacific;  Union 
Pacific  ;  Burlington  &  Missouri  River;  Sioux  City  &  Pacific ; 
Missouri  River;  Chicago,  Iowa,  &  Nebraska;  Hannibal 
&  St.  Joseph ;  and  the  St.  Paul  and  Sioux  City.  Most 
of  the  above  roads  received  grants  of  lands;  some  of 
them  received  subsidy  bonds,  ostensibly  for  the  public  ben 
efit,  but  in  reality  for  the  purpose  of  combining  in  one  the  in 
terests  of  all  these  combinations.  Whatever  may  have  been 


38  MONOPOLIES   AND    THE    PEOPLE. 

the  intention  of  congress  in  granting  exclusive  privileges  to 
these  companies  and  permitting  them  to  unite,  the  effect  has 
been  to  fasten  upon  the  great  west  a  monopoly,  that  for  all 
time  to  come  will  be  an  instrument  of  oppression.  With  its 
vast  power  and  wealth  it  can  but  control  the  fortune  of  the 
laboring  and  producing  classes  inhabiting  the  richest  portion 
of  our  common  country.  The  further  fact  that  this  great  cor 
porate  power  is  the  particular  pet  of  congressmen,  and  that 
among  its  directors  and  stockholders  are  members  and  ex- 
members  of  congress,  render  the  hope  of  any  change  in  favor 
of  the  people  remote,  if  at  all  attainable.  If  the  reader  is  de 
sirous  of  learning  who  are  the  directors  and  managers  of  the 
Pacific  railroad  and  branches,  he  has  only  to  consult  Poor's 
Railroad  Manual  for  1872-3.  He  will  find  among  the  present 
directors  the  men  who,  in  congress,  voted  the  lands  and  sub 
sidies  to  the^companies  in  which  they  are  now  directors,  and 
also,  that  some  of  these  directors  are  now  holding  the  office  of 
congressmen  and  of  United  State's  senators. 

By  the  acts  of  congress  granting  and  amending  the  charters 
of  the  Pacific  railroad  companies  and  branches,  it  is  made  the 
duty  of  the  president  of  the  United  States  to  appoint  five 
directors,  "  who  shall  be  denominated  directors  on  the  part  of 
the  government,"  and  these  acts  forbid  such  directors  being 
stockholders  in  said  Pacific  railroad  companies.  It  is  made 
the  duty  of  these  government  directors  to  exercise  a  general 
supervision  of  the  Pacific  road  and  branches,  and  to  report  its 
condition  from  time  to  time  to  the  secretary  of  the  interior. 
In  contemplation  of  law  they  are  to  have  no  pecuniary  interest 
in  the  companies  or  in  the  roads.  The  present  government 
directors  are  B.  F.  Wade,  of  Ohio;  Hiram  Price,  and  J.  F. 
Wilson,  of  Iowa;  J.  C.  S.  Harrison,  of  Indiana;  and  D.  S. 
Ruddock,  of  Connecticut.  By  act  of  congress  of  June  2d, 
1864,  the  Cedar  Rapids  &  Missouri  River  railroad  was  author 
ized  to  connect  with  the  Iowa  branch  of  the  Union  Pacific 
road,  and  sections  fifteen  and  sixteen  of  the  acts  of  July  2d, 
1864,  place  all  roads  connecting  with  the  Union  Pacific  on  an 
equality  as  to  charges  for  freights  and  passengers,  and  permits 
them  to  consolidate  if  they  elect  so  to  do.  The  Cedar  Rapids 
&  Missouri  River  company  has  leased  its  road  to  the  Chicago 


THE    MONOPOLISTS   "HELP   THEMSELVES."  39 

&  Northwestern  company,  and  it  is  operated  in  connection 
with  the  Union  Pacific,  uniting  with  it  at  Council  Bluffs,  and 
it  virtually  becomes  a  branch  of  the  Union  Pacific  road.  The 
reader  can  look  over  the  list  of  directors,  as  shown  in  the 
Railroad  Manual  before  referred  to,  and  learn  if  any  of  the 
government  directors  of  the  Union  Pacific  are  directors  in  the 
Cedar  Eapids  &  Missouri  River  company.  The  reports  made 
of  the  cost,  condition,  and  other  matters  connected  with  Pacific 
railroad  enterprises,  disclose  such  utter  disregard  of  the  rights 
and  interests  of  the  people,  and  such  a  gross  betrayal  of  the 
public  good  for  the  benefit  of  a  ring  (in  part  a  congressional 
ring)  as  to  leave  it  without  precedent. 

The  fact  that  the  men  who  formed  this  ring  have  become  a 
powerful  moneyed  aristocracy,  able  by  their  votes  and  influence 
in  congress  to  convert  the  public  lands  and  money  to  their 
own  use,  and  are  now  boldly  taxing  the  people  with  the  inter 
est  on  the  money  appropriated  to  build  up  these  oppressive 
monopolies,  should  arouse  the  country  to  a  sense  of  its  immi 
nent  peril. 


CHAPTER  IV. 


HOW  CONGRESS  BETRAYED  THE  PEOPLE. 

I  1ST  order  to  fully  realize  the  great  power  of  what  is  known 
as  the  Pacific  railroad  companies,  it  will  be  necessary  to 
look  at  the  Central  Pacific  company,  and  its  control  of  the 
transportation  of  freights  and  passengers  from  the  Pacific 
country.  This  company,  organized  under  the  laws  of  Cali 
fornia,  was,  by  acts  of  congress  of  J  uly  1st,  1862,  admitted 
into  the  grand  combination  known  as  the  Pacific  roads,  and 
granted  equal  privileges  with  the  Union  Pacific  and  branches. 
The  Central  Pacific  extends  from  the  Pacific  ocean  to  Ogden, 
a  distance  of  eight  hundred  and  eighty-one  miles.  The  acts  of 
congress  of  April  4th,  1864,  and  July  2d,  1864,  granted  to 
this  company  additional  privileges  and  powers,  including  the 
right  of  consolidating  with  all  the  companies  on  the  Pacific 
coast.  In  1870  the  following  companies,  to-wit :  The  Western 
Pacific  railroad  company ;  the  San  Francisco,  Oakland,  &  Ala- 
Tneda  railroad  company ;  the  San  Joaquin  railroad  company ; 
the  California  &  Oregon  railroad  companies  were  consolidated. 
The  state  of  California  at  that  date  had  but  one  thousand 
and  thirteen  miles  of  road  within  its  borders.  Of  this  number 
of  miles,  about  one-half  became  a  part  of  the  Central  Pacific, 
by  the  consolidation  as  above  stated.  All  the  roads  pointing 
towards  the  east  were  combined  in  this  one  great  corporation, 
forming  a  solid  body,  with  one  common  and  general  object 
and  interest,  viz  :  a  monopoly  of  the  travel  and  traffic  with 
the  eastern  states.  And  congress,  by  appropriating  lands  and 
subsidy  bonds,  and  granting  exclusive  rights  and  privileges  to 
this  monster  monopoly,  has  given  it  the  key  not  only  to  the 
overland  commerce  of  the  country,  but  also  to  the  commerce 
of  our  country  with  other  nations  upon  the  Pacific  ocean.  This 
giant  monopoly,  by  the  aid  of  congress,  has  obtained  the  abso- 


HOW  CONGRESS  BETRAYED  THE  PEOPLE.  41 

lute  control  of  the  best  interests  of  the  whole  people  for  all 
time  to  come  — a  control  that  is  now  being  used,  and  will  con 
tinue  to  be  used,  to  enrich  its  own  members  and  stockholders 
by  oppressive  levies  for  transportation  over  its  roads. 

To  fully  comprehend  the  cost  to  the  country  of  these  muni 
ficent  gifts  by  congress  to  the  Union  and  Central  Pacific  cor 
porations,  let  us  examine  the  expense  somewhat  in  detail. 

First.  A  grant  is  made  of  all  the  material  needed  in  the 
construction  of  the  roads,  found  within  ten  miles  of  the  line 
of  said  roads. 

Second.     A  grant  of  thirty-five  million  acres  of  the  public 
lands,  amounting,  at  $1.25  per  acre,  to  $43,750,000.     This  vast 
amount  of  land  is  taken  from  the  people  and  given  to  compa 
nies  by  congressmen  who  in  some  instances  are  members  of 
the  companies,  and  receive  their  pro  rata  share  of  the  grants. 
Third.     Aid  voted  by  congress  in  shape  of  subsidy  bonds, 
§65,000,000,  payable  in  thirty  years,  with  six  per  cent  per  an 
num.     The  theory  was  that  the  companies  would  pay  the  in 
terest  as  it  matured  (semi-annually)  and  eventually  the  princi 
pal.     But  that  this  was  not  the  intent  of  the  companies,  nor  of 
congress,  is  apparent  from  the  different  acts  regulating  the 
matter,  and  as  the  case  stands,  the  government  is  actually  pay 
ing  the  interest  and  collecting  the  amount  from  the  people  in 
tariffs  and  excise  taxes.     The  payment  of  the  amount  of  these 
bonds,  with  the  interest  according  to  their  terms,  will  require 
about  $200,000,000.     This  amount,  or  nearly  all  of  it,  will  be 
paid  by  the  people,  and  not  by  the  companies.     The  report  of 
the  secretary  of  the  treasury  shows  that  the  amount  of  interest 
annually  due  on  these  subsidy  bonds  is  $3,875,000,  of  which 
the  Pacific  railroad  companies  have  paid  about  $750,000,  and 
the  government  the  balance,  say  $3,125,000.     The   original 
charter  of  the  companies  provided  that  the  charges  for  carry 
ing  done  for  the  government  should  be  credited  to  the  compa 
nies  in  liquidation  of  these  bonds,  and  also  that  five  per  cent 
of  the  net  earnings  of  the  road  should  be  applied  to  the  same 
object      The  secretary  of  the  treasury  of  the  United  States 
insisted  that  these  companies  should  be  bound  by  this  pro 
vision  of  their  charters,  refused  to  pay  them  their  earnings  for 
government  services,  and  also  demanded  the  five  per  cent, 
5 


42  MONOPOLIES   AND   THE    PEOPLE. 

under  the  law.  The  companies  refused  to  pay  the  five  per 
cent  of  their  net  earnings,  and  demanded  pay  for  transporta 
tion.  If  we  remember  that  congress  had  already  so  amended 
the  charters  of  these  companies  as  to  permit  them  to  issue 
$65,000,000  of  their  own  bonds  as  "  first  mortgage  bonds,"  and 
provided  that  the  subsidy  bonds  obtained  from  government 
should  be  subordinate  or  junior  to  the  bonds  issued  by  the 
companies,  and  also  bear  in  mind  that  these  amendments  also 
provided  that  whenever  twenty  miles  of  road  was  completed 
the  patent  for  twenty  sections  of  land  per  mile  was  to  issue  to 
the  companies,  so  that  when  the  roads  were  completed  they 
would  have  title  to  all  their  lands,  we  will  see  good  reasons  for 
the  stand  taken  by  the  United  States  secretary  of  the  treasury. 
The  security  which  the  United  States  had  for  the  payment 
of  the  principal  and  interest  of  the  bonds,  under  the  charter, 
was  destroyed  by  subsequent  legislation,  and  unless  the  secre 
tary  could  retain  the  amounts  due  from  government  for  trans 
portation,  and  collect  the  five  per  cent,  the  whole  amount  of 
the  subsidy  bonds,  would  be  lost  to  the  government  and  the 
people.  The  facts  of  the  case  being  well  known  to  congress, 
who  are  supposed  to  be  the  representatives  of  the  people,  and 
to  legislate  in  their  interest  and  for  their  benefit,  it  would 
hardly  be  supposed  that  an  act  wpuld  pass  both  branches,  and 
receive  the  approval  of  the  president,  compelling  the  secretary 
of  the  treasury  to  yield  to  the  demands  of  these  corporatinos. 
Honest  legislation,  and  a  decent  regard  for  the  public  welfare, 
would  seem  to  forbid  any  attempt  on  the  part  of  any  one  of 
the  departments  of  the  government  to  aid  the  companies  in 
their  dishonest  endeavor  to  avoid  the  provisions  of  a  charter 
which  had  been  enacted  for  their  special  benefit.  And  when 
it  is  remembered  that  at  the  time  the  application  was  made  to 
congress  (March,  1871)  certain  members  were  stockholders 
and  directors  in  these  same  companies,  one  would  not  think 
it  possible  that  an  act  could  be  passed  relieving  the  companies 
from  these  requirements  of  their  charters,  or  only  possible  be 
cause  of  the  practice  being  so  long  established  for  congress 
men  to  appropriate  public  lands  and  moneys  to  their  own  use, 
that  they  had  arrived  at  the  point  where  they  deemed  the  prop 
erty  and  money  of  the  government  lawful  plunder,  and  that 


HOW  CONGRESS  BETRAYED  THE  PEOPLE.  43 

their  first  duty  was  to  provide  for  the  rings  and  corporations 
in  which  they  had  a  personal  interest.  It  seems  to  have  re 
quired  some  strategy  for  the  friends  of  these  corporations  to 
grant  them  the  aid  they  asked.  Afraid  to  take  issue  with  the 
secretary  of  the  treasury,  and  unwilling  to  hazard  the  success 
of  their  scheme  by  an  attempt  to  pass  an  act  for  the  relief  of 
these  railroad  companies  independently  of  any  other  measure, 
to  insure  the  safe  passage  of  the  legislation  and  its  approval  by 
the  president,  congress,  by  an  amendment,  tacked  it  to  the  army 
appropriation  bill  (which  passed  March  3d,  1871),  secured  the 
relief  asked  for. 

Section  nine  of  the  army  appropriation  bill  reads  as  fol 
lows  :  "  That,  in  accordance  with  the  fifth  section  of  the  act 
approved  July  2,  1864,  entitled  '  An  act  to  amend  an  act  to 
aid  in  the  construction  of  a  railroad  and  telegraph  line  from 
the  tyTissouri  river  to  the  Pacific  ocean,  and  to  secure  the  same 
for  postal,  military,  and  other  purposes,  approved  July  1, 1862,' 
the  secretary  of  the  treasury  is  hereby  directed  to  pay  over  in 
money  to  the  Pacific  railroad  companies  mentioned  in  said 
act,  and  performing  services  for  the  United  States,  one-half  of 
the  compensation,  at  the  rate  provided  by  law  for  such  services 
heretofore  or  hereafter  to  be  rendered  :  Provided,  that  this  sec 
tion  shall  not  be  construed  to  aftect  the  legal  rights  of  the  gov 
ernment  or  the  obligations  of  the  companies,  except  as  herein 
specifically  provided." 

This  act  was  approved  by  the  president,  and  the  question  at 
issue  between  the  secretary  of  the  treasury  and  the  companies 
was  settled  by  congress  in  favor  of  the  latter  —  absolutely  re 
lieving  them  from  the  payment  of  any  part  of  the  $65,000,000 
of  subsidy  bonds,  except  such  sums  as  may  be  paid  by  allow 
ing  the  government  to  retain  one-half  of  the  earnings  of  the 
roads  for  carrying  mails,  etc.,  which  sums,  as  shown  by  the 
companies  themselves,  amount  to  less  than  one-fourth  of  the 
annual  interest  accruing  on  the  bonds.  The  people  must  pay 
all  the  balance,  principal  and  interest.  These  companies  have 
received,  in  lands  and  bonds,  from  the  general  government, 
about  $109,000,000,  to  aid  in  the  construction  of  their  roads, 
and  all  that  government  receives  in  return  is  one-half  of  the 
fare  levied  on  government  transportation  over  these  roads,  "  at 


44  MONOPOLIES   AND   THE    PEOPLE. 

the  price  fixed  by  law."  The  only  provision  as  to  price  is, 
that  after  having  donated  to  the  companies  sufficient  to  pay 
the  entire  cost  of  the  construction  of  the  roads,  government 
shall  pay  such  reasonable  prices  as  may  be  agreed  upon,  not 
exceeding  the  rate  the  companies  charge  to  other  parties. 
When  we  say  "  the  entire  cost,"  we  do  not  mean  the  full  cost 
claimed  by  the  companies,  for  it  is  not  policy  for  them  to  make 
a  correct  showing  in  this  matter;  we  mean  the  real  actual  cost. 
We  cannot  find  a  statement  of  the  cost  of  the  Union  Pacific, 
and  do  not  know  what  the  company  claim  to  be  its  co?t  per 
mile,  or  the  aggregate  cost.  The  Central  Pacific  puts  the  cost 
of  its  roads  at  $120,000,000,  or  about  $136,000  per -mile.  It 
shows  a  paid-up  capital  stock  of  $54,000,000,  and  a  funded 
debt  of  about  $82,000,000,  making  its  indebtedness  about 
$16,000,000  more  than  the  entire  cost  of  its  road,  including 
rolling  stock  and  equipments.  Making  a  liberal  margin  for 
the  value  of  these  last  named  items,  and  allowing  the  Central 
Pacific  to  cost  nearly  double  the  ordinary  cost  of  other  roads, 
and  the  reader  must  conclude  that  there  has  been,  in  this  case, 
a  watering  of  stock  and  an  excessive  issue  of  bonds  for  the 
benefit  of  the  company  and  at  the  expense  of  the  people.  The 
statement  of  the  capital  stock  and  funded  debt  of  the  Union 
Pacific  shows  about  the  same  condition  for  its  road  as  to  in 
debtedness  ;  but  the  estimated  cost  of  the  road  is  not  given. 

For  proof  that  we  are  not  mistaken  in  our  estimated  cost  of 
these  roads,  and  that  the  companies  have  received  from  the 
government  a  sum  more  than  sufficient  to  defray  the  entire 
expense  of  their  construction,  we  turn  to  reports  of  the  cost 
of  railroads  generally,  in  the  country,  made  by  men  who  are 
in  sympathy  with  our  present  railroad  system.  These  men 
say  that  the  cost  of  railroads  in  this  country,  from  their  first 
introduction,  is  about  $50,000  per  mile,  and  that  those  con 
structed  recently  will  average  about  $30,000  per  mile.  We 
are  apt  to  think  that  the  cost  of  the  Pacific  roads  would  exceed 
that  of  most  other  roads.  Such  is  not  the  fact.  On  the  con 
trary,  taking  the  entire  road  into  consideration,  the  line  was 
more  favorable  than  any  other  in  the  country.  It  is  thus 
described  in  the  Railroad  Manual,  before  referred  to  : — 

c"  The  route  for  the  eastern  portion  of  the  line  is  up  the  val- 


HOW  CONGRESS  BETRAYED  THE  PEOPLE.          45 

ley  of  the  Platte,  which  has  a  course  nearly  due  east  from  the 
base  of  the  mountains.  Till  these  are  reached,  this  valley 
presents,  probably,  the  finest  line  ever  adopted  for  such  a 
work  for  an  equal  distance.  It  is  not  only  straight,  but  its 
slope  is  very  nearly  uniform  towards  the  Missouri,  at  the  rate 
of  about  ten  feet  to  the  mile.  The  soil  on  the  greater  part  of 
the  line  forms  an  admirable  road  bed.  The  road,  after  leaving 
the  mountains,  has  very  few  affluents,  the  only  constructed 
bridges  for  the  distance  being  one  over  the  Loup  Fork  and 
the  North  Platte.  The  base  of  the  mountains  is  assumed  to 
be  at  Cheyenne,  five  hundred  and  seventeen  miles  from  the 
Missouri  river.  This  part  is  elevated  six  thousand  and  sixty- 
two  feet  above  the  sea,  and  five  thousand  and  ninety-five  feet 
above  Omaha.  From  Cheyenne  to  the  summit  of  the  moun 
tains,  which  is  elevated  eight  thousand  two  hundred  and  forty- 
two  feet  above  the  sea,  the  distance  is  thirty-two  miles.  The 
grades  for  reaching  the  summit  do  not  exceed  eighty  feet  to 
the  mile.  The  elevation  of  the  vast  plain  from  which  the 
Rocky  mountains  arise,  is  so  great,  that  the  mountains,  when 
they  are  reached,  present  no  obstacles  so  formidable  as  those 
offered  by  the  Allegheny  ranges  to  several  lines  of  railroads 
which  cross  them.  *  *  *  The  line  of  the  railroad  up  the 
eastern  slope  of  the  Rocky  mountains  is  not  so  difficult  as 
those  upon  which  several  great  works  have  been  constructed 
in  the  eastern  states.  After  crossing  the  eastern  crest  of  the 
mountains,  the  line  traverses  an  elevated  table  land  for  about 
four  hundred  miles,  to  the  western  crest  of  the  mountains, 
which  forms  the  eastern  rim  of  the  Salt  Lake  basin,  and  which 
has  an  elevation  of  seven  thousand  five  hundred  and  fifty  feet 
above  the  sea.  Upon  this  elevated  table  land  is  a  succession 
of  extensive  plains,  which  present  great  facility  for  the  con 
struction  of  the  road.  The  whole  line  is  a  very  favorable  one, 
when  its  immense  length  is  considered.  More  than  one-half 
of  it  is  practically  level,  while  the  mountain  ranges  are  sur 
mounted  by  grades  not  in  any  case  exceeding  those  now 
worked  upon  some  of  our  most  successful  roads." 

The  description  of  the  line  of  the  Central  Pacific,  or  western 
six  hundred  and  sixty-seven  miles,  from  Ogden  to  Sacramento, 
will  not  vary  much  from  that  given  of  the  Union  Pacific.  It 


46  MONOPOLIES   AND   THE   PEOPLE. 

is  not  quite  so  favorable.  Taking  the  character  of  the  route 
as  given,  with  the  facilities  for  building  the  road,  and  it  is  not 
probable  that  the  actual  cost  of  construction  averaged  more 
than  $30,000  per  mile,  or  $57,000,000  for  the  whole  line. 
Taking  the  highest  rate,  as  given,  viz  :  $50,000,  and  apply  it 
to  the  whole  road,  the  entire  cost  would  be  $94,000,000. 

To  aid  in  the  construction  of  this  road,  the  government  is 
sued  subsidy  bonds  at  the  rate  of  $48,000  per  mile  for  three 
hundred  miles,  $32,000  per  mile  for  nine  hundred  and  four 
miles,  and  $16,000  per  mile  for  the  balance  of  the  main  road 
and  branches.  The  funded  debt  of  the  companies  owning  and 
operating  the  road  (not  including  the  debts  of  the  branches), 
after  deducting  the  amount  of  bonds  they  received  from  the 
government,  to-wit :  $65,000,000,  is,  as  shown  by  their  own  re 
port,  $93,000,000.  How  much  their  floating  debt  amounts  to 
we  cannot  tell.  The  stock  on  their  road  cannot  cover  one- 
tenth  of  the  amount  of  their  debts.  The  companies  report  a 
paid  up  capital  stock  of  $91,028,190.  The  statement  of  ac 
count  would  be  about  as  follows  : — 

CREDIT  ACCOUNT. 

Paid  up  capital $91,028,190 

Bonds  from  government 65,000,000 

Funded  debt 93,000,000 


Total  invested $249,028,190 

CONTRA. 

Actual  cost  of  construction $94,000,000 


Balance $155,028,190 

Deduct,  for  37,500,000  acres  of  land  at  $1.25  per 

acre 46,875,000 


Balance  against  road $108,153,190 

Thus,  after  placing  the  land  received  from  the  government 
to  the  credit  of  the  road,  still  a  small  balance  of  more  than 
$108,000,000  has  disappeared,  and  the  companies  are  not  able 
to  pay  the  interest  on  the  government  bonds.  The  reports  of 


HOW  CONGRESS  BETRAYED  THE  PEOPLE.  47 

these  companies  show,  for  the  year  1871,  that  the  net  earnings 
of  their  roads  (over  and  above  all  expenses,  including  taxes, 
repairs,  damages  to  property  and  persons,  cost  of  snow  sheds, 
and  all  other  items  of  expense)  amounted  to  about  $9,000,000, 
and  yet,  because  these  companies  asked  it,  congress  released 
them  from  the  payment  of  the  interest  on  the  subsidy  bonds. 

The  conclusion  to  be  drawn  from  the  facts  of  the  case,  as 
they  develop  themselves,  is,  that  these  Pacific  railroad  com 
panies  have  used  the  federal  offices,  and  the  public  moneys, 
and  lands,  for  enriching  themselves;  that  a  company  of  men, 
in  congress,  and  out  of  it,  have  cDmbined  and  confederated 
together  for  the  purpose  of  robbing  the  people,  and  control 
ling  the  government.  We  have  selected  the  Union  and  Cen 
tral  Pacific  companies  for  illustrations,  and  attempted  to  state 
the  facts  in  their  case,  not  because  of  any  exception  that  they 
present  to  the  general  rale,  but  to  show  the  manner  in  which 
the  people  are  duped  and  defrauded  by  congressmen  voting 
government  aid  to  railroad  companies,  under  the  pretext  of 
developing  the  country,  and  the  equally  false  necessity  of  pro 
viding  speedy  and  secure  transportation  for  the  mails,  troops, 
supplies,  and  munitions  of  war.  - 

One  peculiar  feature  about  the  whole  matter  is,  that  con 
gressmen  have  deemed  it  necessary  for  the  accomplishment  of 
their  object,  to  become  personally  interested  in  their  own  leg 
islation  by  subscribing  stock,  and  becoming  directors  in  the 
companies  to  which  they  voted  these  aids.  We  can  name 
congressmen  who,  if  they  were  not  stockholders  in  these 
Pacific  roads,  at  the  time  the  bonds  and  lands  were  voted, 
certainly  were  stockholders  and  directors  when  these  compa 
nies  were  relieved  from  the  payment  of  the  interest  on  the 
bonds  issued  to  them  by  the  government,  to- wit :  Oakes  Ames 
and  James  Brooks.  How  many  more  held  stock  we  cannot 
tell ;  but  the  fact  that  members  were  stockholders  and  directors 
must  have  been  known  to  the  different  departments,  for,  under 
the  charter  of  these  companies,  the  directors,  and  especially 
the  government  directors,  are  required  to  report  in  detail  the 
condition  of  the  companies,  and  the  names  of  the  directors 
once  each  year  to  the  secretary  of  the  interior,  at  m  Washing 
ton.  If  the  reader  would  know  the  extent  of  congressional 


48  MONOPOLIES   AND   THE    PEOPLE. 

legislation  in  favor  of  the  rings,  and  combinations  of  men, 
plundering  the  people,  he  need  only  look  over  the  different 
acts  of  congress  passed  directly  for  their  benefit  during  the 
last  twelve  years.  'He  will  arise  from  their  perusal  feeling  that 
the  chief  duty  of  the  government  is  to  foster,  protect,  and 
enrich  these  rings  at  the  expense  of  the  people. 

These  Pacific  companies  are  required,  by  their  charters,  to 
construct  telegraph  lines  along  the  route  of  their  roads,  and 
to  transmit  messages  for  the  government  at  such  rates  as  they 
charge  other  parties.  The  appropriations  by  congress  show 
that  $40,000  have  been  voted  annually  to  pay  for  telegraphic 
dispatches,  between  the  Atlantic  and  Pacific,  but  thereis  noth 
ing  to  show  that  any  such  sum  was  due  from  the  government 
for  telegraphing.  Among  the  appropriations  is  an  item  for 
the  mileage  of  the  government  engineer  for  travel,  from  Cin 
cinnati  to  Omaha,  and  from  Omaha  to  Washington,  and 
thence  to  New  York ;  but  the  charters  of  the  companies  re 
quired  them  to  pay  the  expenses  incurred  on  account  of  the 
services  of  persons  appointed  by  the  president  to  inspect  these 
roads.  Indeed,  the  action  of  congress  is  such  as  to  induce 
the  belief,  that  these  roads,  if  not  owned  by  the  general  gov 
ernment,  are  owned  by  congress,  or  congressmen,  and  that  it 
is  perfectly  legitimate  and  proper  for  government  to  pay  the 
cost  of  their  construction,  and  of  the  telegraph  lines,  and  also 
their  running  expenses.  The  energy  and  zeal  manifested  by 
congress,  in  aid  of  these  corporations,  and  the  great  number 
and  variety  of  acts  passed  for  their  benefit,  demonstrate  the  fact 
that  while  the  representatives  of  the  people  assemble  at  Wash 
ington  ostensibly  to  legislate  for  the  public  generally,  they 
devote  their  time  to  legislation  for  their  own  benefit,  and  that 
of  the  numerous  corporations  and  companies  of  which  they 
are  members. 


CHAPTER  V. 


CONGRESS    BECOME    A    STOCK    EXCHANGE. 

IN  scanning  the  names  of  the  directors  of  the  railroad  cor 
porations  which  have  received  large  grants  of  lands,  sub 
sidies,  and  special  and  exclusive  privileges,  we  find  many  ex- 
members  of  congress  in  whose  terms  of  service  these  grant* 
were  voted.  We  also  find  members  of  congress  who  were  di 
rectors  at  the  time  their  relief  and  aid  bills  were  passed.  We 
find  one  member  who  is  now  a  director  in  three  of  the  com 
panies  receiving  the  largest  sums  from  government,  and  which 
are  considered  the  best  of  all,  because  of  the  opportunity  they 
present  to  enterprising  men  of  legislative  and  financial  ability; 
and  in  order  that  proper  provision  should  be  made  for  his 
kindred,  one  of  the  brothers  of  this  same  congressman  is  a  di 
rector  in  five  of  these  land  grant  subsidy  corporations.  These 
jobs  are  "nice  and  fat,"  made  so  by  the  unjust  legislation  of 
congress,  and  being  "nice  and  fat,"  the  division  and  distribu 
tion  of  the  spoils  is  made  among  these  congressmen  and  their 
friends.  The  practice  of  voting  the  money  and  lands  of  the 
public  to  these  corporations  has  become  so  common  that  it 
is  considered  legitimate  to  bribe  or  buy  the  votes  and  influence 
of  certain  congressmen  in  favor  of  certain  grants.  Large 
bribes  have  been  offered,  and  perhaps  accepted  for  these  pur 
poses.  So  common  is  the  practice  of  lobbying  these  jobs 
through  congress  that  it  excites  but  little  attention  save  in  ex 
traordinary  cases,  and  elicits  but  little  comment.  The  power 
and  corrupting  influence  of  these  corporations  have  grown  to 
such  proportions  that  they  and  their  friends  in  congress  can 
disregard  and  defy  public  opinion,  and  compel  all  the  depart 
ments  of  the  government  to  yield  to  their  demands.  They 
plunder  the  people  with  impunity.  They  have  transformed 
the  government;  while  we  are  in  nap  e  a  republic,  and  theo- 
6 


50  MONOPOLIES    AND   THE    PEOPLE. 

retically  the  people  govern,  we  are  in  fact  an  oligarchy,  and 
corporations  rule  the  country.  If  the  reader  has  followed  us 
thus  far  he  will  have  seen  that  while  the  idea  of  public  necess 
ity  has  been  put  prominently  forth  as  the  excuse  for  the  great 
donations  made  to  railroad  companies,  and  the  apology  for- the 
special  privileges  granted  to  them,  in  fact,  the  real  object  has 
been  to  create  by  special  charter  a  privileged  class  with  facili 
ties  to  amass  fortunes,  and  by  the  power  granted  to  this  class 
of  perpetual  succession  and  exclusive  right  under  the  law,  to 
compel  the  whole  people  to  pay  tribute  to  it.  This  power  is 
so  great  at  this  time,  that  it  controls  the  whole  commerce  of  the 
country,  and  as  we  will  hereafter  demonstrate,  it  controls  not 
only  the  financial,  but  also  the  judicial  department,  and  reigns 
supreme  in  the  general  politics  of  the  country.  Looking  at 
these  charters  the  thought  is  presented  to  the  mind,  and  the 
idea  is  incorporated  in  the  charter,  that  the  people  of  the  whole 
country  are  petitioning  congress  to  grant  aid  to  these  compa 
nies  for  the  purpose  of  developing  the  country;  that  by  a  spon 
taneous  movement  on  the  part  of  the  whole  people  congress 
is  called  upon  to  incorporate  these  different  companies,  and  to 
grant  lands  and  money  to  aid  in  the  different  enterprises  as 
they  are  presented.  To  give  color  to  this  idea,  the  names  of 
men  from  most  of  the  states  and  territories  are  included  among 
the  incorporators,  some  fifteen  or  twenty  of  whom  are  named 
as  provisional  directors  who  are  to  hold  their  places  until  the 
first  regular  meeting  of  the  company,  and  the  election  of  offi 
cers.  Congress  fixes  the  time  and  place  of  meeting  and  the 
notice  to  be  given  to  the  stockholders,  and  to  carry  out  the 
idea  that  it  is  to  be  a  company  in  which  all  can  participate, 
the  charter  provides  that  any  person  can  subscribe  stock  and 
become  a  stockholder  who  desires  to  do  so.  In  fact  though, 
no  petitions  have  been  presented  to  congress,  nor  do  any  con 
siderable  number  of  the  persons  named  as  corporators  know 
of  the  organization,  or  that  their  names  have  been  used;  nor 
is  it  intended  that  they  should  know;  the  fifteen  or  twenty  in 
terested  parties  who  have  formed  their  plan  for  a  raid  upon 
the  treasury,  are  the  only  ones,  besides  their  particular  friends 
in  congress,  who  are  supposed  to  know  anything  about  it. 
These  fifteen  or  twenty  men  who  have  gotten  up  the  scheme, 


CONGRESS  BECOME  A  STOCK  EXCHANGE.          51 

meet  and  elect  themselves  directors,  and  are  then  ready  for 
action.  Having  obtained  their  charters,  and  organized  under 
them,  the  work  of  robbing  the  people  begins.  With  their  friends, 
and  some  of  their  directors  in  Congress,  they  have  been  able 
thus  far  to  obtain  all  they  have  demanded.  There  is  no  au 
thority  for  the  assumption  that  the  chartering  of  these  compa 
nies  is  in  obedience  to  the  wish  of  the  people,  either  expressed 
or  implied.  On  the  contrary,  this  action  of  congress  has  uni 
formly  been  in  opposition  to  public  opinion,  and  indeed  it  has 
excited  popular  remonstrance.  None  but  the  few  who  wish 
to  get  their  hands  into  the  public  treasury  have  asked  the  in 
terference  of  congress,  or  desired  the  government  to  aid  in 
these  enterprises.  So  great  is  their  anxiety  to  aid  in  the  de 
velopment  of  the  country  that  substantially  the  same  compa 
nies  undertake  to  construct  all  the  roads  for  which  congress 
will  grant  sufficient  aid.  All  these  railroad  schemes  which 
have  received  the  special  attention  of  congress  were  planned 
by  a  set  of  unscrupulous  men,  who  combined  to  plunder  the 
treasury. 

The  system  of  aiding  in  the  construction  of  railroads  by 
grants  of  land  was  inaugurated  in  1850,  by  grants  to  the  Illi 
nois  Central,  and  did  not  develop  itself  fully  until  1862,  when 
the  plan  of  obtaining  charters  from  congress,  connected  with 
grants  of  land  and  subsidies,  was  systematically  adopted.  Since 
the  latter  date,  the  practice  has  increased  with  fearful  rapidity, 
and  within  the  last  four  or  five  years  it  has  assumed  such  im 
mense  proportions  as  to  threaten  the  entire  subversion  of  the 
government. 

The  greatest  raid  made  upon  congress  for  these  grants  and 
special  charter  privileges  during  any  one  term  was  at  the  sess 
ion  closing  March  4th,  1868.  When  it  is  remembered  that 
the  public  business  did  not  require  the^e  roads,  and  that  the 
people  had  not  asked  congress  to  aid  in  their  construction,  it 
seems  incredible  that  in  the  fortieth  congress  representatives 
and  senators  should  have  introduced  more  than  one  hundred 
and  fifty  bills  and  resolutions  to  aid  railroad  companies.  Yet 
such  is  the  fact.  A  gentleman  who  spent  much  time  in  Wash 
ington,  and  examined  into  this  matter  writes  as  follows: 

"  The  latest  developments  show  that  in  the  grandeur  and 


52  MONOPOLIES    AND   THE    PEOPLE. 

number  of  their  schemes  of  spoil  and  plunder,  the  congress 
ional  rings  of  railroad  jobbers  throw  into  the  shade  all  other 
rings  of  the  lengthy  catalogue  of  confederate  treasury  rob 
bers.  *  *  *  One  hundred  and  fifty-nine  railroad 
bills  and  resolutions  have  been  introduced  in  the  fortieth  con 
gress,  and  twice  as  many  more  are  in  preparation  in  the  lobby; 
one  hundred  millions  of  acres  of  the  public  lands,  and  two 
hundred  millions  of  United  States  bonds  would  not  supply  the 
demands  of  these  cormorants.  In  other  words,  this  stupen 
dous  budget  of  railway  jobs  would  require  sops  and  subsidies 
in  lands  and  bonds,  which,  reduced  to  a  money  valuation, 
would  swell  up  to  the  magnificent  figure  of  half  of  the  nation 
al  debt!"  He  continues:  "Among  the  jobs  of  this  schedule 
is  the  Atchison  &  Pike's  Peak  railroad  company,  or  Union 
Pacific  Central  branch,  which,  after  having  received  govern 
ment  sops  to  the  extent  of  six  millions,  puts  in  for  seven  mil 
lions  more.  Next  conies  the  Denver  Pacific  and  Telegraph 
company,  which,  having  feathered  its  nest  to  the  tune  of 
thirty-two  millions,  puts  in  for  a  little  more,  and  this  company 
is  reported  to  be  a  mere  gang  of  speculators  without  any 
known  legal  organization  whatever — a  set  of  mythical  John 
Does  and  Richard  Roes,  who  cannot  be  found  when  called  for. 
Next,  we  have  the  Leavenworth,  Pawnee,  &  Western  rail 
road,  now  known  as  the  Union  Pacific,  eastern  division,  char 
tered  by  the  Kansas  territorial  legislature  in  1865,  subsidized 
with  Delaware  Indian  Reserve  lands  in  1861,  and  then  in  1862, 
by  a  rider  on  the  Pacific  railroad  law,  granted  sixteen  thou 
sand  dollars  per  mile  in  United  States  bonds  and  every  alter 
nate  section  of  land  within  a  certain  limit  on  each  side  of  the 
line  of  the  road,  and  the  privilege  of  a  first  mortgage  (by  sub 
sequent  amendment)  to  secure  bonds  issued  by  the  company 
to  the  amount  of  sixteen  thousand  dollars  per  mile.  It  fur 
ther  appears  that  a  clique  of  seceders  from  the  old  company 
illegally  formed  a  new  company,  and  having  by  force  of  arms 
taken  possession  of  the  road,  are  pocketing  the  spoils  which 
legally  belong  to  the  old  company.  All  this,  too,  with  the 
consent  of  the  president,  the  secretary  of  the  treasury,  and 
congress.  From  another  source  we  learn  that  some  half  doz 
en  Pacific  branch  or  main  stern  railroads,  northern  and  south- 


CONGRESS   BECOME   A    STOCK    EXCHANGE.  53 

ern,  are  on  the  anvil,  involving  lands  and  bonds  by  tens  and 
twenties  and  hundreds  of  millions;  that  Senator  Pomeroy  of 
Kansas,  has  seven  of  these  jobs  on  the  docket;  Senator  Ram 
sey  of  Minnesota,  four;  Senator  Conners  of  California,  five; 
and  Senator  Karlan  of  Iowa,  four.  Senator  Pomeroy,  however, 
distances  all  competitors  in  the  number  and  extent  of  his  jobs, 
for  as  it  appears,  they  include  a  line  from  Kansas  to  Mexico, 
three  bills  for  roads  from  Fort  Scott  to  Santa  Fe,  in  Texas,  a 
South  Carolina  road  through  the  Sea  Island  cotton  section, 
two  or  three  lines  from  the  Mississippi  river  through  to  Texas, 
and  a  little  private  Atchison  Pacific  —  one  of  the  nicest  and 
fattest  speculations  ever  worked  through.  Is  not  this  a  mag 
nificent  budget,  and  is  not  the  audacity  of  these  railroad  jobs 
and  jobbers  positively  sublime?" 

We  do  not  vouch  for  the  entire  accuracy  of  the  statements 
above  quoted,  but  we  know  that  much  contained  in  them  is 
absolutely  true.  If  the  congressional  committee  now  inves 
tigating  the  alleged  Credit  Mobilier  frauds,  perform  their  duty 
honestly  and  faithfully,  we  will  probably  learn  that  the  John 
Does  and  Richard  Roes  referred  to,  were  Ames,  Alley,  and 
other  distinguished  persons  in  congress  a"nd  out  of  it.  An 
expose  by  this  committee  of  the  sum  total  voted  to  this  eastern 
division  of  the  Union  Pacific,  and  the  actual  cost  of  the  road 
and  telegraph  lines,  would  show  a  large  margin  for  division, 
a  goodly  portion  of  which  found  its  way  into  the  pockets  of 
members  of  congress.  Can  it  be  claimed  that  the  needs  of 
government  required  these  large  subsidies  of  lands  and  mon 
ey?  Had  the  people  requested  congress  to  make  these  grants? 
Has  the  development  of  this  country  returned  to  the  people  a 
tithe  of  the  wealth  thus  recklessly  given  away  by  congress? 
The  people  are  now  groaning  under  the  burdens  imposed  up 
on  them  by  reckless  or  dishonest  legislation  at  Washington. 
We  might  well  stop  and  inquire,  from  what  source  the  power 
for  this  kind  of  legislation  is  derived.  Mr.  Washburn  of  Illi 
nois,  now  United  States  minister  at  Paris,  in  a  speech  in  con 
gress,  in  the  winter  of  1868,  seems  to  have  comprehended  the 
situation,  and  in  opposition  to  the  system  of  plundering  the 
public  treasury  spoke  as  follows : 

"  With  the  unreconstructed  states  admitted  into  the  Union, 


54  MONOPOLIES   AND   THE   PEOPLE. 

with  full  and  equal  protection  for  all  men,  in  all  of  the  states, 
and  with  manhood  suffrage  secured  by  legislation  or  constitu 
tional  amendments,  the  minds  of  the  people  will  turn  to  ques 
tions  of  finance,  of  taxes,  of  economy,  of  decreased  expendi 
tures,  and  honest  and  enlightened  legislation — to  questions  of 
tariff,  and  to  questions  of  railroads,  telegraphs,  and  express 
monopolies  which  are  sucking  the  very  life-blood  of  the  peo 
ple — to  the  administration  of  the  revenue  laws  and  to  the  rob 
beries  and  plunderings  of  the  treasury  by  dishonest  office  hold 
ers.  Already  the  eyes  of  the  people  of  this  country  are  upon 
congress.  I  may  say  they  are  upon  the  republican  majority 
in  congress,  for  that  majority  is  now  responsible  before  the 
country  for  the  legislation  of  congress.  It  can  make  and  un 
make  laws  in  defiance  of  executive  vetoes.  The  republican 
party  triumphed  because  it  was  pledged  to  honesty  and  econ 
omy,  to  the  upholding  of  public  faith  and  credit,  and  to  the 
faithful  execution  of  the  laws.  *  *  *  The  condi 
tion  of  the  country,  the  vast  public  debt,  the  weight  of  taxa 
tion,  the  depreciated  and  fluctuating  currency,  the  enormous 
expenditure  of  public  money,  mal-administration  of  the  gov 
ernment,  the  extortion  of  monopolies  press  upon  our  attention 
with  most  crushing  force.  The  people  elected  General  Grant 
to  the  presidency,  not  only  on  account  of  the  great  and  inesti 
mable  services  he  had  rendered  the  country,  in  subduing  the 
rebellion,  not  only  on  account  of  his  devotion  to  the  great  prin 
ciples  of  the  republican  party,  but  because  they  believed  him 
to  be  emphatically  an  honest  man,  and  an  enlightened  states 
man  who  would  faithfully  administer  the  laws  without  fear, 
favor,  or  affection.  The  time  has  come  when  we  are  impera 
tively  called  upon  to  take  a  new  departure.  Added  to  the 
other  terrible  evils  brought  upon  the  country  by  the  war 
for  the  suppression  of  the  great  rebellion,  in  the  demor 
alization  incident  to  all  great  wars,  and  to  the  expendi 
ture  of  vast  and  unheard  of  amounts  of  public  money;  to 
the  giving  out  of  immense  contracts,  by  which  sudden  and 
vast  fortunes  were  made ;  the  inflation  of  the  currency,  which 
engendered  speculation,  profligacy,  extravagance,  and  corrup 
tion,  by  the  intense  desire  to  get  suddenly  rich  out  of  the  gov 
ernment  and  without  labor,  and  the  inventions  and  schemes 


CONGRESS   BECOME  A   STOCK   EXCHANGE.  55 

generally  to  get  money  out  of  the  treasury  for  the  benefit  of 
individuals  without  regard  to  the  interest  of  the  government. 
While  the  restless  and  unpausing  energies  of  a  patriotic  and 
incorruptible  people  were  devoted  to  the  salvation  of  their  gov 
ernment,  and  were  pouring  out  their  blood  and  treasure  in  its 
defence,  there  was  a  vast  army  of  the  base,  the  venal,  and  un 
patriotic  who  rushed  to  take  advantage  of  the  misfortune  of 
their  country,  and  to  plunder  its  treasury.  The  statute  books 
are  loaded  with  legislation  which  will  impose  burdens  on  fu 
ture  generations.  Public  land  enough  to  make  empires  has 
been  voted  to  private  railroad  corporations;  subsidies  of  un 
told  millions  of  bonds,  for  the  same  purposes,  have  become  a 
charge  upon  the  people,  while  tjie  fetters  of  vast  monopolies 
have  been  fastened  closer  and  still  closer  upon  the  public.  It 
is  time  that  the  representatives  of  the  people  were  admonished 
that  they  are  the  servants  of  the  people,  and  are  paid  by  the 
people ;  that  their  constituents  have  confided  to  them  the  great 
trust  of  guarding  their  rights  and  protecting  their  interests; 
that  their  position  and  their  power  is  to  be  used  for  the  bene- ' 
fit  of  the  people  whom  they  represent,  and  not  for  their  own 
benefit,  and  the  benefit  of  the  lobbyists,  the  gamblers,  and  the 
speculators  who  have  come  to  Washington  to  make  a  raid  up 
on  the  treasury." 

The  above  shows  the  light  in  which  Mr.  Washburn,  four 
years  ago,  viewed  the  matters  of  which  we  are  now  treating. 
Since  the  delivery  of  that  speech  act  after  act  has  been  passed 
by  congress  in  favor  of  these  corporations,  giving  them  great 
er  privileges,  releasing  them  from  their  obligations  to  govern 
ment,  discharging  their  liability  to  government  for  many  mill 
ions  of  money,  and  to  accomplish  this,  imposing  upon  the  peo 
ple  additional  burdens  and  taxes  for  which  no  equivalent  has 
been  or  even  wijl  be  given.  The  determination  to  plunder 
the  government  and  people,  seems  to  control  not  only  the  ad 
venturers  who  go  to  Washington  to  lobby  their  schemes 
through  congress,  but  also  congressmen  themselves,  who  be 
come  chiefs  among  this  class  of  money  and  land  grabbers. 
They  vote  to  the  corporations,  of  which  they  are  a  part,  large 
sums  in  money  and  lands,  and  then  use  the  means  thus  ob 
tained  for  the  purpose  of  bribing  and  corrupting  their  fellow 
members  in  favor  of  other  and  larger  robberies. 


CHAPTER  VI. 

HOW  THE  LAND  GRANT  RAILROADS  "  DEVELOPE  "  A  COUNTRY. 


THE  ostensible  object  in  granting  lands  to  railroad  compa 
nies  was  to  aid  new  and  undeveloped  portions  of  the 
country   in   procuring   necessary   railroad    facilities   for 
communication  with  the  rest  of  the  world ;  and  to  assist,  by 
donations  of  alternate  sections,  in  their  development  and  set 
tlement. 

Whether  these  ends  have  been  achieved  is  a  matter  of  doubt. 

I  It  is  scarcely  to  be  hoped  that  the  people  will  ever  be  reim 
bursed  for  the  vast  extent  of  lands,  and  large  amount  of  bonds, 
which  have  been  so  recklessly  lavished  upon  so  many  railroad 
companies.  When  the  proposition  to  grant  lands  to  railroad 
companies  was  brought  before  congress,  the  right  to  donate 
them  to  private  corporations  was  not  admitted ;  the  right  of 
the  states  to  have  control  of  the  lands  was  not  questioned. 
Recognizing  this  latter  right,  the  lands  were  granted  to  the 
states  for  the  purpose  of  aiding  in  the  construction  of  certain 
roads  within  their  borders.  It  was  not  until  1862  that  con 
gress  came  to  the  front,  created  private  railroad  corporations, 
and  endowed  them  with  lands  and  money.  Nor  did  these  cor 
porations  commence  tljeir  wholesale  raid  upon  the  public 
treasury  until  after  congress  went  into  the  business  of  creat 
ing  railroad  companies.  Is  it  true  that  the  country  has  been 
benefited  in  proportion  to  the  grants  made  ?  Are  the  people 
richer  because  of  these  grants  ?  Has  the  country,  as  a  general 
rule,  been  more  rapidly  settled  and  improved  by  this  railroad 
legislation  ?  We  are  aware  that  the  idea  is  commonly  enter 
tained  that  the  people  receive  an  equivalent  for  these  railroad 
grants  in  the  increased  facilities  for  travel  and  transportation 
of  freights.  Were  it  true  that  the  roads  receiving  grants  of 
land  were  more  speedily  constructed,  or  that  transportation 


DO    LAND    GRANTS    "DEVELOPED    A    COUNTRY?  57 

over  them  was  less  expensive,  then  we  would  admit  that  the 
benefits  derived  would  in  some  degree  be  an  equivalent  for  the 
aid  afforded  them.  To  ascertain  the  facts  let  us  see  how  this 
legislation  has  affected  the  west,  taking  Iowa  and  Kansas  as 
illustrations. 

In  the  first  place,  for  every  acre  of  land  given  to  railroads 
in  these  states  the  people  have  paid  $1.25 ;  inasmuch  as  they 
are  charged  $2.50  for  the  reserved  alternate  sections.  Taking 
the  land  granted  in  Iowa,  the  amount  charged  to  the  peo 
ple  of  this  state  is  $9,009,841,  or,  taking  the  grants  already 
certified  to,  the  people  are  charged  with  $4,387,303  This  sum, 
amounting  to  about  $4.00  per  head,  has  been  taken  from  the 
people  of  Iowa  and  given  to  railroad  companies,  and  must  be 
charged  against  the  benefits  received.  The  construction  of 
about  eleven  hundred  miles  of  railroad  in  Iowa  was  aided  by 
land  grants.  The  cost,  at  $30,000  per  mile,  would  be  less  than 
$33,000,000.  The  amount  the  people  are  obliged  to  pay  into 
the  public  treasury  for  the  reserved  sections,  in  making  up  the 
account  should  be  charged  to  the  land  grant  roads,  as  also  the 
increased  price  they  are  compelled  to  pay  the  companies  for 
the  donated  lands,  which  range  from  $5.00  to  $50.00  per  acre; 
and  this,  too,  of  lands  that  under  the  general  laws  they  could 
have  entered  at  $1.25  per  acre. 

^he  amount  taken  from  the  people  who  settle  in  and  im 
prove  the  state  and  develop  its  resources,  which  they  must  pay 
to  the  government  and  these  railroad  companies  before  getting 
title  to  their  lands,  is  about  $25,000,000  more  than  would  have 
been  demanded  of  them  but  for  these  land  grants.  What  have 
they  received  in  return  ?  The  companies  in  Iowa  receiving 
grants  of  land  have  not  extended  their  lines  across  the  state 
more  rapidly  than  companies  receiving  no  grants.  In  fact, 
roads  built  entirely  with  private  means  have  been  constructed 
more  rapidly  than  these  land  grant  roads.  The  companies  re 
ceiving  the  grants  did  not  keep  pace  with  the  settlement  of 
the  country;  the  people,  as  pioneers,  were  always  in  advance 
of  the  roads.  It  was  only  when  the  population  of  the  country 
was  sufficient  to  afford  a  paying  business  that  the  roads  were 
extended.  The  excuse  paraded  by  congress  for  making  these 
grants  was  that  the  companies  would  advance  their  roads  so  as  to 
7 


58  MONOPOLIES    AND    THE    PEOPLE. 

draw  after  ther»i  an  agricultural  population.  This  has  not  been 
done.  On  the  contrary,  the  lands  outside  of  the  boundaries  of 
the  railroad  grants  were  the  first  settled,  and  the  most  rapidly 
developed.  Has  the  result  been  different  in  Kansas?  The 
number  of  miles  of  railroad  in  this  state  in  1870  was  about 
seventeen  hundred,  of  which  nearly  one  thousand  received 
grants  of  land,  and  the  Kansas  Pacific  company  $6,303,000  in 
subsidy  bonds.  Companies  constructing  these  roads  received 
land  grants  to  the  amount  of  5,420,000  acres.  At  $1.25  per 
acre  the  grants  amount  to  $6,775,000.  This  sum  is  charged 
upon  the  reserved  sections  as  in  Iowa,  and  must  be  paid  by 
the  people  of  Kansas.  Add  to  this  the  $6,303,000  subsidy 
bonds,  and  the  Kansas  railroads  have  cost  the  people  of  that 
state  and  the  public  treasury  $13,000,000,  outside  of  the  im 
mense  local  aid  voted  to  them  by  the  different  cities,  towns  and 
counties.  The  population  of  this  state  in  1860  was  107,206. 
In  1870  it  was  362,872.  Saying  nothing  about  the  increased 
prices  to  be  paid  to  the  railroad  companies  for  the  lands  granted 
to  them,  or  the  large  amount  of  subsidy  bonds,  and  leaving 
out  the  immense  amounts  of  local  aid  afforded  to  the  different 
railroads,  and  the  sum  to  be  charged  to  the  railroads  for  the 
extra  price  of  the  reserved  sections  is  about  $20.00  per  head 
for  the  entire  population.  Looking  at  the  facts  as  they  are  de 
veloped  we  conclude  that  the  people  have  not  been  benefited 
by  these  grants  of  lands,  that  railroad  companies  are  the  only 
parties  benefited,  that  the  people  are  not  richer  because  of 
these  grants,  but,  on  the  contrary,  they  would  have  made 
money  by  giving  to  the  railroad  companies  the  actual  cost  of 
the  roads. 

Has  the  country  been  more  rapidly  settled  and  improved  by 
reason  of  this  special  legislation  ?  The  leading  idea  advanced 
in  favor  of  grants  to  railroad  companies  has  been  their  neces 
sity  in  developing  the  new  states  and  territories.  We  are 
pointed  to  the  new  states  of  Iowa,  Minnesota,  Nebraska,  Kan 
sas,  and  Nevada,  and  the  territories  of  Colorado,  Utah,  and 
Wyoming,  and  referred  to  the  fact  that  these  states  have  a  pop 
ulation  of  2,874,000,  and  9,000  miles  of  railroad;  and  from 
this  exhibit  an  argument  is  deduced  in  favor  of  these  grants. 
The  theory  is  that  the  population  has  followed  the  roads.  Is 


DO  LAND  GRANTS  "  DEVELOPS "  A  COUNTRY':'         59 

this  theory  correct?  In  1850  Iowa  had  a  population  of  676,- 
913,  and  in  1870  a  population  of  1,191,729.  In  1860  there 
were  655  miles  of  railroad,  about  three-fourths  of  which  h&d 
received  grants  of  land.  In  1870  the  number  of  miles  of  rail 
road  had  increased  to  2,668.  Of  this  increase  not  more  than 
one-third  was  aided  by  land  grants,  private  enterprise  having 
constructed  at  least  two-thirds  of  it ;  and  the  same  kind  of  en 
terprise  is  still  at  work,  and  since  1870  has  increased  the  num 
ber  of  miles  to  3,250.  The  land  grants  were  nearly  all  made 
to  Iowa  in  1856,  yet  the  energetic  and  rapid  building  of  roads 
was  not  shown  until  after  the  close  of  the  war,  nor  until  the 
people  had  advanced  beyond  the  roads,  and  their  necessities 
demanded  them.  Kansas  in  1860  had  a  population  of  107,209  ; 
In  1870  it  had  increased  to  364,400.  Prior  to  1864  it  had  no 
railroads.  In  1870  it  had  1,501  miles,  all  of  which,  save  forty 
miles,  was  built  in  four  years.  Nearly  all  of  the  Kansas  roads 
were  aided  by  grants,  and  some  of  them  by  subsidy  bonds.  In 
1870  there  was  one  mile  of  railroad  in  Kansas  for  every  242 
inhabitants.  To  construct  these  roads  in  Kansas,  counties, 
cities,  and  towns  have  taxed  themselves  by  vote  to  the  amount 
of  $4,400,000,  or  about  $9.00  to  each  1 1 habitant.  This  debt 
must  be  charged  to  the  railroad  account,  and  a  similarly  voted 
indebtedness  in  Iowa  to  the  amount  of  about  $6,000,000.  t  The 
valuation  of  property  in  Iowa  in  1860  was  $205,166,000,  and 
in  1870  $302,515,000.  Thus  while  the  population  of  the  state 
had  nearly  doubled,  and  the  lines  of  railroad  had  more  than 
quadrupled,  the  valuation  had  increased  less  than  fifty  per  cent, 
and  at  least  one-half  of  this  increase  was  in  the  value  of  rail 
roads.  Deducting  from  the  increased  valuation  of  property  in 
Kansas  the  value  of  railroads  there,  and  about  the  same  state 
of  facts  appears.  The  figures  in  these  two  states  will  show, 
that  so  far  from  the  donations  of  land  and  money  adding  to 
their  wealth  the  reverse  is  true.  And  this  position  is  supported 
by  the  exhibit  of  other  states.  In  Pennsylvania  the  population 
has  increased  since  1860,  600,000.  The  mileage  of  railroads  has 
nearly  doubled  in  this  time,  and  the  valuation  of  property  has 
increased  from  $719,253,000  to  $1,318,236,000.  In  that  state, 
where  no  government  aid  has  been  voted  to  railroads,  the 
wealth  of  the  state  has  nearly  doubled,  while  in  the  same  time 


60  MONOPOLIES    AND    THE    PEOPLE. 

in  the  state  of  Iowa  it  has  not  increased  fifty  per  cent,  land 
grants  included. 

The  population  of  Nebraska  has  increased  from  7,000  to 
42,000  in  the  last  decade.  This  state  has  598  miles  of  railroad, 
or  one  mile  of  railroad  to  each  seventy  of  its  population,  nearly 
all  aided  by  grants. 

California  had  a  population  in  1860  of  380,000.  In  1870  it 
had  increased  to  560,000. 

Colorado  in  the  last  decade  increased  from  34,000  to  40,000. 
In  this  territory  there  are  392  miles  of  railroad,  all  built  by 
grants  of  lands  and  bonds. 

Of  course  the  roads  through  the  territories  are  the  Pacific 
roads,  but  as  the  states  and  territories  were  both  cited  as  illus 
trations  of  the  wisdom  of  congress  in  making  grants  to  com 
panies  for  the  construction  of  railroads,  we  have  examined  the 
matter  somewhat  in  detail  to  show  the  weakness  of  the  argu 
ment.  If  we  take  the  census  of  1860  and  that  of  1870,  and  observe 
the  increase  in  population,  wealth,  and  railroad  building,  we 
will  discover  that  the  laws  of  trade,  of  supply,  and  demand 
have  controlled  the  whole  matter,  and  that  the  growth  of  the 
country  has  not  been  increased  because  of  these  grants  from 
government.  In  all  cases  where  the  construction  of  railroads 
has  approached  the  frontier  line  of  settlement,  it  has  drawn 
but  little  population  after  it,  aside  from  the  employes  of  the 
road.  The  real  pioneer  immigration,  that  which  opens  and 
improves  the  country,  is  doing  now  what  it  has  done  for  the 
last  generation,  moving  steadily  to  the  west,  followed  and  sur 
rounded  by  railroad  sharks  and  jobbers,  who,  after  getting  all 
they  can  from  government,  prey  upon  the  people;  and  the 
people  of  the  new  states,  instead  of  being  blessed  with  the 
means  of  adding  to  their  wealth,  find  themselves  burdened 
with  debt  and  taxes,  fastened  upon  them  by  the  construction  of 
railroads,  many  of  which  are  of  doubtful  utility.  As  a  neces 
sary  consequence  of  the  railroad  taxes  upon  their  lands,  and 
the  excessive  charges  imposed  for  the  transportation  of  their 
produce,  their  tarms  do  not  appreciate  in  value,  and  the  antic 
ipated  rapid  increase  in  population  and  wealth  of  the  locality 
is  not  realized.  From  a  view  of  the  whole  situation,  regard 
ing  the  benefits  accruing  to  the  people  from  these  grants  to 
railroad  companies,  with  what  the  people  have  paid  for  them, 


DO    LAND    GRANTS    UDBVELOPE"    A    COUNTRY?  61 

the  withholding  of  these  railroad  lands  from  market,  and  the 
high  prices  charged  per  acre  by  the  companies,  together  with 
the  unjust  privileges  granted  to  these  corporations,  we  con 
clude  that  the  people  of  the  new  states  and  territories  have  not 
received  an  equivalent  for  the  grants  made  to  railroad  compa 
nies.  We  are  aware  that  a  different  opinion  prevails,  and  that 
our  conclusions  will  be  controverted;  but  when  it  is  remem 
bered  that  thousands  of  people  have  left  Iowa,  or,  coming  from 
the  east,  have  refused  to  setde  in  Iowa,  because  of  the  fact  that 
lands  could  only  be  had  by  purchase  from  railroad  companies 
at  extravagant  prices,  and  that  for  this  reason  vast  tracts  of 
Iowa  lands  are  yet  unimproved  which  would  now  be  settled 
upon  and  cultivated  had  they  not  thus  been  withdrawn  from 
the  market,  it  must  be  admitted  that  Iowa  would  have  had  a 
greater  population,  and  greater  wealth,  had  her  railroad  com 
panies  received  no  land  grants.  And  what  is  true  of  Iowa  is 
also  true,  as  a  general  rule,  of  other  states  and  territories. 
Perhaps  an  exception  exists  in  the  far  western  territories,  whose 
gold  and  silver  mines  are  in  themselves  an  exception  to  the 
general  rule,  and  where  agriculture  has  but  few  followers. 

The  advocates  of  the  railroad  land  grant  and  subsidy  bond 
system  for  the  settlement  of  a  country  have  the  following  to 
say  in  its  favor.  We  quote  from  the  Railroad  Manual  before 
referred  to :  "  One  of  the  most  remarkable  things  connected 
with  the  progress  of  this  country  is  the  construction  of  rail 
roads  in  advance  even  of  the  lines  of  settlement  of  our  people. 
Such  result  is  largely  due  to  the  grants  made  by  government 
of  lands  for  the  encouragement  of  these  works.  Never  was  a 
policy  more  wise  or  more  beneficent."  No  instances  can  be 
shown  where  railroads  have  been  built  in  advance  of  the  line 
of  settlement,  save  when  the  objective  point  could  only  be 
reached  by  passing  over  an  unsettled  country,  as  in  the  case  of 
the  road  from  the  Atlantic  to  the  Pacific  states.  In  all  other 
cases,  railroad  companies  have  awaited  the  settlement  and 
development  of  the  country,  and  followed,  not  led,  our  pioneer 
corps.  Of  the  wisdom  and  beneficence  of  these  grants  the 
people  can  judge  from  their  acquaintance  with  the  workings  of 
the  system,  and  the  wholesale  robberies  and  frauds  practiced 
by  the  companies,  to  some  of  which  we  have  already  referred. 
Again  the  author  says:  "  The  government  has  been  greatly  the 


62  MONOPOLIES    AND    THE    PEOPLE. 

gainer  in  a  pecuniary  point  of  view,  as  it  was  enabled  to  sell  the 
land  reserved  at  twice  the  established  rate."  It  is  not  clearty  seen 
how  this  gain  is  made.  The  people,  who  are  the  government 
give  away  one-half  of  their  lands,  and  then  pay  into  their 
treasury  just  money  enough  for  the  remaining  half  to  make  up 
the  value  of  the  lands  they  have  given  away.  The  only  gain 
the  government  has  made  (and  this  is  not  a  pecuniary  one)  is 
the  reflection  that  the  men  who  have  received  these  large 
grants  have  become  rich,  while  the  people  have  been  deprived 
of  their  lands  at  the  original  price ;  they  must  pay  for  one-half 
of  them  a  double  price,  and  for  the  residue  just  what  they  can 
buy  it  for  from  the  corporations  to  whom  their  servants  have 
donated  it.  This  author  says  :  "That  the  public  has  reaped  the 
advantage  of  the  construction  of  some  ten  thousand  miles  of 
railroads,  that  otherwise  would  not  have  been  built."  Is  this 
true  ?  In  Iowa  the  land-grant  roads  were  not  built  as  fast  as 
other  roads  having  no  grants,  and  the  companies  finally  com. 
pleted  them  because  they  were  about  to  lose  their  lands  by 
longer  delay.  And  in  other  states  and  territories  some  of  these 
land  grant  roads  are  dragging  their  slow  length  along,  and  are 
being  constructed  only  as  fast  as  the  lines  are  settled  with  a 
sufficient  number  of  inhabitants  to  make  the  business  of  the 
roads  profitable.  After  showing  that  in  certain  states  and  ter 
ritories  there  is  now  one  mile  of  railroad  for  each  three  hun 
dred  inhabitants,  the  author  adds :  "  This  is  certainly  a  most 
wonderful  exhibit,  and  is  one  no  other  nation  can  display,  and 
which  in  our  case  has  only  been  secured  by  the  wise,  benevo 
lent  policy  of  our  government,  which  in  this  way  did  more  to 
give  remunerative  employment  to  the  poorer  classes  than  any 
other  legislation  could  adopt."  It  is  certainly  a  "  most  wonderful 
exhibit"  It  is  one  that  "  no  other  nation  can  display ;  "  but  its  wis 
dom  and  benevolence  are  matters  of  grave  doubt.  If  we  add  to 
this  "  wonderful  exhibit  "  the  $65,000,000  stolen  from  the  people 
by  corrupt  men  and  interested  legislation,  with  the  $3,126,000 
annual  interest  that  the  whole  people  are  taxed  to  pay,  because  the 
Pacific  railroad  companies  and  the  congressional  Credit  Mobilicr 
have  wrongfully  appropriated  this  vast  sum  to  their  own  use, 
it  presents  truly  "  a  most  wonderful  exhibit,"  without  a  parallel 
in  any  country  in  the  world,  but  its  wisdom  and  benevolence 
are  certainly  wanting. 


CHAPTER  VII. 


THE  CREDIT  MOBILIER,  AND  A  VILLAINOUS  CONTRACT. 

WE  now  approach  one  of  the  grandest  schemes  for  de 
frauding  a  people  ever  conceived  in  the  breast  of  the 
speculator.  Before  considering  the  Credit  Mobilier, 
and  to  show  the  utter  rottenness  of  the  policy  of  affording  con 
gressional  aid  to  railroads,  indulge  us  in  a  brief  re-survey  of 
the  subsidy  bonds  issued  to  the  Pacific  railroad  corporations. 
We  may  concede  that  at  the  date  of  the  original  charter  of 
these  companies,  there  were  no  congressman  interested  in  the 
grand  scheme,  and  ihat  it  was  planned  by  outside  combina 
tions.  The  charter  received  various  amendments,  with  addi 
tional  aids  and  privileges  after  members  of  congress  had  be 
came  interested;  these  amendments  were  made  while  direc 
tors  of,  and  contractors  for,  these  Pacific  roads  were  occupying 
seats  in  congress.  Whether  or  not  they  voted  for  these  amend 
ments  does  not  appear,  but  it  is  certain  they  did  not  oppose 
them.  As  we  have  already  shown,  the  aid  voted  by  congress 
was  ample  to  build  and  equip  these  roads,  taking  the  state 
ments  of  the  Railroad  Manual  upon  the  character  of  the  coun 
try  through  which  they  pass,  and  the  average  cost  of  railroads, 
as  the  basis  for  our  conclusion.  The  companies  could  have 
built  the  roads  without  using  the  capital  stock  they  reported 
as  paid  up.  The  Union  Pacific  has  made  no  public  exhibit  of 
the  cost  of  its  portion  of  the  roads,  and  from  this  fact  we  are 
at  liberty  to  infer  that  an  honest  exhibit  would  present  a  bad 
look.  Facts  enough  have  been  disclosed  to  prove  that  the 
stockholders  and  directors  of  the  Union  Pacific  company  had 
formed  a  combination  for  the  purpose  of  defrauding  the  gov 
ernment  and  the  people.  The  letting  of  the  contract  for  the 
construction  of  its  division  of  the  roads  presents  one  of  the 
most  perfect  combinations  for  private  speculation  at  the  ex- 


64  MONOPOLIES   AND   THE    PEOPLE. 

pense  of  the  public  that  was  ever  planned  or  executed.  When 
this  division  was  completed,  according  to  the  statements  of 
the  company  it  was  indebted  in  the  sum  of  $112,911,512.  The 
cost  of  the  whole  line  of  road,  at  the  highest  price  per  mile 
given,  to-wit,  $50,000,  would  a  mount  to  less  than  one-half 
of  the  reported  indebtedness  of  the  company,  including  the 
paid-up  capital  reported  as  $37,000,000.  To  show  what  was 
done  with  the  subsidy  bonds  issued  to  this  company,  we  must 
look  at  the  contract  made  by  the  directors  with  Oakes  Ames 
for  the  construction  of  six  hundred  and  sixty-seven  miles  of 
the  road,  and  the  subsequent  transfer  of  this  contract  to  the 
Credit  Mobilier  of  America.  Let  us  remember  that,  in  addi 
tion  to  the  bonds  issued  by  -government  to  the  amount  of 
$16,000  per  mile  for  a  part  of  the  road,  $32,000  per  mile  for  a 
part,  and  $48,000  per  mile  for  a  part,  congress,  by  a  subse 
quent  amendment  to  the  charter,  allowed  the  company  to  issue 
its  own  bonds,  for  a  like  amount  per  mile,  as  first  mortgage 
bonds,  and  that  at  the  time  of  making  the  contract  now  under 
consideration,  the  directors  of  the  company,  and  of  the  Credit 
Mobilier  were  the  same  persons,  some  of  whom  were  at  that 
time  and  since  members  of  congress.  With  these  facts  before 
us,  we  can  see  the  reason  for  the  excess  of  the  debts  over  the 
cost  of  the  road,  as  well  as  for  many  of  the  peculiar  features  of 
this  singular  contract.  The  executive  committee  of  the  com 
pany  was  composed  of  the  following  named  persons :  Oliver 
Ames  (brother  of  Oakes  Ames,  contractor  and  member  of  con 
gress),  C.  S.  Bushnell,  Springer  Harbaugh,  and  Thomas  C.  Du- 
rant.  The  seven  directors  of  the  company  who  were  made  trus 
tees,  and  who  signed  the  transfer  of  the  contract  to  the  Credit 
Mobilier,  were  Thomas  C.  Durant,  Oliver  Ames,  John  B.  Alley 
(a  member  of  congress),  Sidney  Dillon,  C.  S.  Bushnell,  H.  S.  Mc- 
Comb,  and  Benjamin  E.  Bates;  and  the  president  of  the  Cred 
it  Mobilier  was  Sidney  Dillon. 

The  grant  of  lands  and  bonds  was  made  to  the  railroad  com 
pany,  as  well  as  the  right  to  issue  their  first  mortgage  bonds. 
All  of  the  contracting  parties  were  directors  in  the  railroad 
company,  and  in  the  Credit  Mobilier.  As  a  body  they  con 
trolled  the  whole  matter.  If  a  desire  to  protect  the  best  inter 
ests  of  the  company,  and  to  deal  honestly  with  the  public  had 


THE    CREDIT    MOBILIER,    AND    A    VILLAINOUS    CONTRACT.    '     65 

actuated  these  men,  and  not  a  determination  to  plunder  the 
puhlic,  no  reason  can  be  shown  for  this  strange  contract ;  hut 
if  it  was  the  intent  of  a  combination  of  men  to  defraud  the  pub 
lic  and  the  government,  then  the  contract  and  its  assignments 
can  easily  be  accounted  for.  All  of  the  stockholders  of  the 
company,  at  the  time  the  contract  was  made  with  Cakes  Ames, 
by  indorsement  on  the  back  of  their  certificates  of  stock,  ap 
pointed  the  above  named  seven  trustees,  irrevocably  to  repre 
sent  their  stock  at  all  business  meetings  and  elections  of  direc 
tors,  during  the  existence  of  the  Ames  contract.  The  follow 
ing  is  a  correct  copy  of  the  contract  and  assignments : 


CREDIT    MOBILIER. 

Agreement  made  this  16th  day  of  August,  1867,  between 
the  Union  Pacific  railroad  company,  party  of  the  first  part, 
and  Oakes  Ames,  party  of  the  second  part,  witne^seth : 

That  the  party  of  the  first  part  agrees  to  let  and  contract, 
and  the  party  of  the  second  part  agrees  to  contract,  as  follows, 
to- wit : 

First.  The  party  of  the  second  part  agrees  and  bind.-;  him 
self,  his  heirs,  executors,  administrators,  and  assigns  to  build 
and  equip  the  following  named  portions  of  the  railroad  and 
telegraph  line  of  the  party  of  the  first  part,  commencing  at  the 
one-hundredth  meridian  of  longitude,  upon  the  following  terms 
and  conditions,  to-wit: 

1.  One  hundred  miles  at  and  for  the  rate  of  $42,000  per 
mile. 

2.  One  hundred  and  sixty-seven  miles  at  and  for  the  rate  of 
$45,000  per  mile. 

3.  One  hundred  miles  at  and  for  the  rate  of  $96,000  per 
mile. 

4.  One  hundred  miles  at  and  for  the  rate  of  $80,000  per 
mile. 

5.  One  hundred  miles  at  and  for  the  rate  of  $90,000  per 
mile. 

6.  One  hundred  miles  at  and  for  the  rate  of  $96,000  per 
mile. 

8 


66       '  MONOPOLIES    AND    THE    PEOPLE. 

Second.  At  least  three  hundred  and  fifty  miles  shall  be,  if 
possible,  completed  and  ready  for  acceptance  before  the  first 
day  of  January,  1868,  provided  the  Union  Pacific  railroad  com 
pany  transport  the  material.  The  whole  to  be  constructed  in 
a  good  and  workmanlike  manner,  upon  the  same  general  plan 
and  specifications  as  adopted  east  of  the  one-hundredth  merid 
ian  of  longitude.  The  party  of  the  second  part  shall  erect  all 
such  necessary  depots,  machine  shops,  machinery,  tanks,  turn 
tables,  and  provide  all  necessary  machinery  and  rolling  stock 
at  a  cost  of  not  less  than  $7,500  per  mile,  in  cash,  and  shall 
construct  all  such  necessary  side  tracks  as  may  be  required  by 
the  party  of  the  first  party,  not  exceeding  six  per  cent  of  the 
length  of  the  road  constructed,  and  to  be  constructed  under 
this  contract.  The  kind  of  timber  used  for  ties  and  in  the 
bridges  and  in  its  preparation,  shall  be  such  as  from  time  to 
time  may  be  ordered  or  prescribed  by  the  general  agent,  or 
the  company,  under  the  rules  and  regulations  and  standard  as 
recommended  by  the  secretary  of  the  interior,  of  the  date  of 
February  — ,  1866. 

Third.  Whenever  one  of  the  aboved  named  sections  of  the 
road  shall  be  finished,  to  the  satisfaction  and  the  acceptance  of 
the  government  commissioners,  the  same  shall  be  delivered 
Into  the  possession  of  the  party  of  the  first  part,  and  upon  such 
portions  of  the  road,  as  well  as  on  that  part  east  of  the  one-hun 
dredth  meridian  now  completed,  the  party  of  the  first  part 
shall  transport,  without  delay,  all  men  and  material  to  be  used 
in  construction  at  a  price  to  be  agreed  upon  by  the  party  of 
the  second  part,  his  heirs,  executors,  administrators  or  assigns, 
and  the  general  agent,  but  not  less  than  cost  to  the  party  of 
'the  first  part. 

Fourth.  The  party  of  the  second  part,  his  heirs,  executors, 
administrators  or  assigns,  shall  have  the  right  to  enter  upon 
all  lands  belonging  to  the  company,  or  upon  which  the  compa 
ny  may  have  any  rights,  and  take  therefrom  any  material  used 
in  the  construction  of  the  road,  and  may  have  the  right  to 
change  the  grade  and  curvature  within  the  limits  of  the  pro 
visions  of  the  act  of  congress  for  the  temporary  purpose  of 
hastening  the  completion  of  the  road ;  but  the  estimated  cost 
of  reducing  the  same  to  grade  and  curvatures,  as  established 


THE   CREDIT    MOBILIER,   AND    A    VILLAINOUS    CONTRACT.   •      67 

by  the  chief  engineer,  or  as  approved  from  time  to  time  by 
the  company,  shall  be  deducted  and  retained  by  the  party  of 
the  first  part,  until  such  grade  and  curvature  is  so  reduced. 

Fifth.  The  party  of  the  second  part,  his  heirs,  executors, 
administrators,  or  assigns,  is  to  receive  from  the  company  and 
enjoy  the  benefits  of  all  existing  contracts,  and  shall  assure  all 
such  contracts  and  all  liabilities  of  the  company  accrued  or 
arising  therefrom  for  work  done  or  to  be  done,  and  material 
furnished  or  to  be  furnished,  for  or  on  account  of  the  road 
west  of  the  one-hundredth  meridian,  crediting,  however,  the 
party  of  the  first  part  on  this  contract  all  moneys  heretofore 
paid  or  expended  on  account  thereof. 

Sixth.  The  party  of  the  second  part,  for  himself,  his  heirs, 
executors,  administrators,  and  assigns,  stipulates  and  agrees 
that  the  work  shall  be  prosecuted  and  completed  with  energy 
and  all  possible  speed,  so  as  to  complete  the  same  at  the  earli 
est  practicable  day,  it  being  understood  that  the  speed  of  con 
struction  and  time  of  completion  is  the  essence  of  this  contract, 
and  at  the  same  time  the  road  to  be  a  first-class  road,  with 
equipments;  and  if  the  same,  in  the  opinion  of  the  chief  engi 
neer,  is  not  so  prosecuted,  both  as  regards  quality  and  dispatch, 
that  then  the  said  party  of  the  first  part  shall  and  may,  through 
its  general  agent  or  other  officer  detailed  for  that  purpose, 
take  charge  of  said  work  and  carry  the  same  on  at  proper  cost 
and  expense  of  the  party  of  the  second  part. 

Seventh.  The  grading,  bridging,  and  superstructure  to  be 
completed  under  the  supervision  of  the  general  agent  of  the 
company,  to  the  satisfaction  of  the  chief  engineer,  and  to  be  of 
the  same  character  as  to  the  workmanship  and  materials  as  in 
the  construction  of  the  road  east  of  the  one-hundredth  me 
ridian. 

It  is,  however,  understood  that  all  iron  hereafter  purchased 
or  contracted  for,  shall  be  of  the  weight  of  not  less  than  fifty- 
six  pounds  to  the  yard,  and  to  be  fish  bar  joints. 

Eighth.  All  the  expenses  of  the  engineering  are  to  be 
charged  and  paid  by  the  party  of  the  second  part,  except  the 
pay  and  salary  of  the  chief  engineer  and  consulting  engineer, 
and  their  immediate  assistants,  and  the  expenses  of  the  gener 
al  survey  of  the  route. 


68  MONOPOLIES   AND   THE    PEOPLE. 

Ninth.  The  depot  buildings,  machine  shops,  water  tanks, 
and  also  bridges  shall  be  of  the  most  approved  pattern,  and 
they,  as  well  as  the  kind  of  masonry  and  other  material  used, 
shall  be  previously  approved  by  the  general  agent  and  chief 
engineer  of  the  company,  and  all  tunnels  shall  be  arched  with 
brick  or  stone,  when  necessary  for  the  protection  of  the  same. 

Tenth.  Payments  to  be  made  as  the  work  progresses,  upon 
the  estimates  of  the  chief  engineer,  in  making  which  the  engi 
neer  shall  deduct  from  each  section  its  proportion  of  the  cost 
of  equipment  not  then  furnished,  station  buildings,  super 
structure,  and  cost  of  telegraph,  but  all  materials  delivered  or 
in  transit  for  the  account  of  the  company  may  be  estimated 
for. 

Eleventh.  Payments  hereon  shall  be  made  to  the  party  of 
the  second  part,  his  heirs,  executors,  administrators,  or  assigns, 
in  cash;  but  if  the  government  bonds  received  by  the  com 
pany  cannot  be  converted  into  money  at  their  par  value  net, 
and  the  first  mortgage  bonds  of  the  company  at  ninety  cents 
on  the  dollar  net,  then  the  said  party  of  the  second  part,  his 
heirs,  executors,  administrators,  and  assigns  shall  be  charged 
thereon  the  difference  between  the  amount  realized  and  the 
above-named  rates;  provided  the  first  mortgage  bonds  are  not 
sold  for  less  than  eighty  cents  on  the  dollar,  and  if  there  shall 
not  be  realized  from  the  sale  of  such  bonds  an  amount  suffi 
cient  to  pay  the  party  of  the  second  part,  his  heirs,  executors, 
administrators,  or  assigns,  for  work,  as  stipulated  in  this  con 
tract,  and  according  to  the  terms  thereof,  then  such  deficiency 
shall  from  time  to  time  be  subscribed  by  said  party  of  the  sec 
ond  part,  his  heirs,  executors,  administrators,  or  assigns,  to 
the  capital  stock  of  said  company,  and  proceeds  of  such  sub 
scriptions  shall  be  paid  to  said  party  of  the  second  part,  his 
heirs,  executors,  administrators,  or  assigns,  on  this  contract. 

Twelfth.  On  the  first  one  hundred  miles  on  this  contract, 
there  shall  be  added  to  the  equipment  now  provided  for  and 
intended  to  apply  on  this  section  as  follows,  viz :  Six  locomo 
tives,  fifty  box  cars,  four  passenger  cars,  two  baggage  cars, 
and  a  proportionate  amount  of  equipment  of  like  character  be 
supplied  to  the  second  section  of  one  hundred  miles,  after  the 
same  is  completed. 


THE   CREDIT    MOBILIER,   AND    A    VILLAINOUS    CONTRACT.         69 

Thirteenth.  The  amount  provided  to  be  expended  for  equip 
ment,  station  buildings,  &c.,  shall  be  expended  under  the  di 
rection  of  the  party  of  the  first  part,  and  in  such  proportion 
for  ears,  locomotives,  machine  shops,  station  buildings,  &c., 
and  at  such  points  as  they  may  determine;  the  party  of  the 
first  part  to  have  the  full  benefit  of  such  expenditures  without 
profit  to  the  contractor,  or  they  may,  in  their  option,  purchase 
the  equipment  and  expend  any  portion  of  said  amount  provid 
ed  at  any  point  on  the  road  where  they  may  deem  the  same 
most  advantageous  to  the  company,  whether  on  the  section  on 
which  said  reservation  occurs  or  not. 

Fourteenth.  The  telegraph  line  is  included  herein  under  the 
term  "  railroad,"  and  is  to  be  constructed  in  the  same  man 
ner  and  with  similar  materials  as  in  the  line  east  of  the  one- 
hundredth  meridian. 

The  said  parties  hereto,  in  consideration-  of  the  premises 
and  of  their  covenants  herein,  do  mutually  agree,  severally,  to 
perform  and  fulfil  their  several  and  respective  agreements 
above  written. 

This  contract  having  been  submitted  to  the  executive  com 
mittee  by  resolution  of  the  board  of  directors,  August  16,  1867, 
and  we  having  examined  the  details  of  the  same,  recommend 
its  execution  by  the  proper  ofiacers  of  the  company  with  the 
Hon.  Oakes  Ames,  the  party  named  as.  the  second  part. 

OLIVER  AMES, 
C.  S.  BUSHNELL, 
SPRINGER  HARBAUGH, 
THOMAS  C.  DURANT. 
Executive  Committee  Union  Pacific 
Railroad  Company. 

Resolved,  the  foregoing  contract  between  the  Union  Pacific 
railroad  company  and  Oakes  Ames,  referred  to  the  executive 
committee  by  a  resolution  of  the  board,  August  16,  1867,  to 
settle  the  details,  be  approved,  and  that  the  proper  officers  of 
the  company  be  instructed  to  execute  the  same,  subject,  how 
ever,  to  the  written  approval  of  the  stockholders  of  the  com 
pany,  as  understood  by  the  board  of  directors  when  the  same 
was  voted  upon. 


70 


MONOPOLIES    AND    THE    PEOPLE. 


Resolved,  that  the  option  to  extend  this  contract  to  Salt  Lake 
be  referred  to  the  board,  with  recommendation  that  said  op 
tion  be  accepted. 

ASSIGNMENT    OF    CONTRACT    TO    SEVEN    TRUSTEES. 

Memorandum  of  agreement,  in  triplicate,  made  this  15th 
day  of  October,  1867,  between  Oakes  Ames  of  North  Easton, 
Massachusetts,  party  of  the  first  part,  Thomas  C.  Durant,  of 
the  city  of  New  York;  Oliver  Ames,  of  North  Easton,  Mass 
achusetts;  John  B.  Alley,  of  Lynn,  Massachusetts;  Sidney 
Dillon,  of  the  city  of  New  York;  Cornelius  S.  Bushnell,  of 
New  Haven,  Connecticut;  Henry  S.  McComb,  of  Wilming 
ton,  Delaware,  and  Benjamin  E.  Bates,  of  Boston,  Massachu 
setts,  parties  of  the  second  part,  and  the  Credit  Mobilier  of 
America,  party  of  the  third  part. 

That  whereas,  the  party  of  the  first  part  has  undertaken  a 
certain  large  contract  for  the  construction  of  certain  portion 
therein  named  of  the  railroad  and  telegraph  line  of  the  Union 
Pacific  railroad  company  over  the  plains  and  through  and  over 
the  Rocky  mountains,  which  will  require  a  very  large  and 
hazardous  outlay  of  capital,  which  capital  he  is  desirous  to  be 
assured  of  raising,  at  such  times,  and  in  such  sums  as  will  en 
able  him  to  complete  and  perform  the  said  contract  according 
to  its  terms  and  conditions. 

And  whereas,  the  Credit  Mobilier  of  America,  the  party  of 
the  third  part,  a  corporation  duly  established  by  law,  is  em 
powered  by  charter  to  advance  and  loan  money  in  aid  of  such 
enterprises,  and  can  control  large  amounts  of  capital  for  such 
purposes,  and  is  willing  to  loan  to  said  party  of  the  first  part 
such  sums  as  may  be  found  necessary  to  complete  said  con 
tract,  provided  sufficient  assurance  may  be  made  to  said  party 
of  the  third  part  therein,  that  said  sums  shall  be  duly  ex 
pended  in  the  work  of  completing  said  railroad  and  telegraph 
line,  and  that  the  payments  for  the  faithful  performance  of 
said  contract  by  said  railroad  company  shall  be  held  and  ap 
plied  to  reimburse  said  party  of  the  third  part  for  their  loans 
and  advances,  together  with  a  reasonable  interest  for  the  use 
of  the  money  so  loaned  and  advanced. 


THE    CREDIT    MOBILIER,    AND    A    VILLAINOUS    CONTRACT.          71 

And  whereas,  said  party  of  the  third  part  fully  believes  that 
said  contract,  if  honestly  and  faithfully  executed,  will  be  both 
profitable  and  advantageous  to  the  parties  performing  the 
same,  and  therefore  willing  to  guarantee  the  performance  and 
execution  of  the  same  for  a  reasonable  commission  to  be  paid 
therefor. 

And  whereas,  both  parties  of  the  first  and  third  parts  have 
confidence  and  reliance  in  the  integrity,  business  capacity,  and 
ability  of  the  several  persons  named  as  parties  of  the  second 
part  hereto,  and  confidently  believe  that  said  persons  have 
large  interests  as  well  in 'the  Union  Pacific  railroad  company 
as  in  the  Credit  Mobiler  of  America,  they  will  execute  and 
perform  the  said  contract,  and  faithfully  hold  the  proceeds 
thereof  to  the  just  use  and  benefit  of  the  parties  entitled 
thereto. 

Therefore,  it  is  agreed  by  and  between  the  said  parties  of  the 
first,  second,  and  third  parts  hereto  as  follows ;  that  is  to  say  : 

That  said  Oakes  Ames,  party  of  the  first  part  hereto,  hereby, 
for  and  in  consideration  of  $1.00  lawful  money  of  the  United 
States,  to  him  duly  paid  by  the  party  of  the  second  part,  and 
for  divers  other  good  and  valuable  considerations  herein,  there 
unto  moving,  doth  hereby  assign,  set  over,  and  transfer  unto 
the  said  Thomas  0.  Durant,  Oliver  Ames,  John  B.  Alley, 
Sidney  Dillon,  Cornelius  S.  Bushnell,  Henry  S.  McComb,  and 
Benjamin  E.  Bates,  parties  of  the  second  part,  all  the  right, 
title,  and  interest  of,  in,  and  to,  the  said  certain  contract  here 
tofore  made  and  executed  by  and  between  the  Union  Pacific 
railroad  company  and  the  said  Oakes  Ames,  bearing  date  the 
16th  day  of  August,  1867,  for  the  construction  of  portions  of 
the  railroad  and  telegraph  line  of  said  railroad  company,  to 
which  contract  reference  is  herein  made  for  them,  the  said 
parties  of  the  second  part,  to  have,  and  to  hold  the  same  to 
them  and  their  survivors  and  successors  forever  in  trust. 

Nevertheless,  upon  the  following  trusts  and  conditions  and 
limitations,  to- wit : — 

1.  That  they,  the  said  parties  of  the  second  part,  shall  per- 
iorm  all  the  terms  and  conditions  of  said  contract  so  assigned 
in  all  respects  which  in  and  by  the  terms  and  conditions  there 
of  is  undertaken  and  assumed  and  agreed  to  be  done  and 
performed  by  the  said  party  of  the  first  part  herein  named. 


72  MONOPOLIES   AND   THE    PEOPLE. 

2.  That  they,  the  said  parties  of  the  second  part,  shall  hold 
all  the  avails  and  proceeds  of  the  said  contract,  and  therefrom 
shall  reimburse  themselves  and  the  party  of  the  third  part 
hereto,  all  moneys  advanced  and  expended  by  them,  or  either 
of  them,  in  executing  or  performing  the  said  contract,  with 
interest  and  commission  thereon  as  hereinafter  provided. 

3.  Out  of  the  said  avails  and  proceeds  to  pay  unto  the  par 
ties  of  the  second  part  a  reasonable  sum  as  compensation  for 
their  service,  as  such  trustees,  for  executing  and  performing 
the  terms  and  conditions  of  this  agreement,  which  compensa 
tion  shall  not  exceed  $3,000  per  annum  to  each  and  every  one 
of  the  parties  of  the  second  part. 

4.  To  hold  all  the  rest  and  residue  of  the  said  proceeds  and 
avails  for  the  use  and  benefit  of  such  of  the  several   persons 
holding  and  owning  shares  in  the  capital  stock  of  the  Credit 
Mobilier  of  America  on  the  day  of  the  date  hereof,  in  propor 
tion  to  the  number  of  shares  which   said   stockholders  now 
severally  hold  and  own,  and  for  the  use  and  benefit  of  such  of 
the  assignees  and  holders  of  such  shares  of  stock  at  the  times 
herein  set  forth,  for  the   distribution   of  said  residue  and  re 
mainder  of  said  avails  and  proceeds,  who  shall  comply  with 
the  provisions,  conditions,  and  limitations  herein  contained, 
which  are  on  their  part  to  be  complied  with. 

5.  To  pay  over  on  or  before  the  first  Wednesday  of  June 
and  September  each  year,  or  within  thirty  days  thereafter,  his 
just  share  and  proportion  of  the  residue  and  remainder  of  the 
said  proceeds  and  avails  as  shall  be  justly  estimated  by  the  said 
trustees  to  have  been  made  and  earned  as  net  profit  on  said 
contract,  during  the  preceding  six  months,  to  each  shareholder 
only  in  said  Credit  Mobilier  of  America,  who  being  a  stock 
holder  in  the  Union  Pacific  railroad  shall  have  made  and  exe 
cuted  his  power  of  attorney  or  proxy,  irrevocable,  to  said  sev 
eral  parties  of  the  second  part,  their  survivors  and  successors, 
empowering  them,  the  said  parties  of  the  second  part,  to  vote 
upon  at  least  six-tenths  of  all  the  stock  owned  by  said  share 
holders  of  the  Credit  Mobilier  of  America,  in  the  capital  stock 
of  the  Union  Pacific  railroad  company,  on  the  day  of  the  date 
hereof,  and  six-tenths  of  any  stock  in  said  Union  Pacific  rail 
road  company  he  may  have  received  a  dividend,  or  otherwise, 


THE    CREDIT    MOBILIER,    AND    A    VILLAINOUS    CONTRACT.          73 

because  or  by  virtue  of  having  been  a  stockholder  in  said 
Credit  Mobilier  of  America,  or  which  may  appertain  to  any 
shares  in  said  Union  Pacific  railroad  company,  which  had  been 
so  assigned  to  him  at  the  time  or  times  of  the  distribution  of 
the  said  profits  as  herein  provided  ;  and  this  trust  is  made  and 
declared  upon  the  express  condition  and  limitation  that  it 
shall  not  enure  in  any  manner  or  degree  to  the  use  or  benefit 
of  any  stockholder  of  the  Credit  Mobilier  of  America  who 
shall  neglect  or  refuse  to  execute  and  deliver  unto  the  said 
parties  of  the  second  part  his  proxy  or  power  of  attorney,  in 
the  manner  and  for  the  purpose  hereinbefore  provided,  or  who 
shall  in  any  way,  or  by  any  proceeding,  knowingly  hinder, 
delay,  or  interfere  with  any  execution  or  performance  of  the 
trust  and  conditions  herein  declared  and  set  forth. 

And  the  above  transfer  and  conveyance  of  said  contract  is 
made  upon  these  further  trusts  and  conditions,  to-wit : — 

1.  The  said  parties  of  the  second  part,  their  survivors  and 
successors,  trustees  as  aforesaid,  in  all  their  acts  and  doings  in 
the   execution   and  performance  of  said   contract,   and  in  the 
execution   of   their  several  trusts  and  conditions   herein    set 
forth,  shall  act  by  the  concurrent  assent  of  four  of  their  num 
ber,  expressed  in  writing,  or  by  yea  and  nay  vote,  at  a  meeting 
of  said  trustees,  either  or  both  of  which  shall  be  recorded  in  a 
book  of  proceedings  of  said  trustees,  kept  for  the  purpose  by 
their  secretary,  and  not  otherwise. 

2.  Said  parties  of  the  second  part  shall  keep   an   office   in 
the  city  of  New  York  for  the  transaction   of  the  business  in 
cidental  to  said  trust.     Meetings  of  said  trustees  may  be  held 
on  call  of  the  secretary  on  request  of  any  two  of  their  number  ; 
such  call  may  be  made  personally  or  by  mail. 

3.  The  said  trustees  shall  appoint  a  competent  person  as 
secretary,  who  shall  keep  a  faithful   record   of  all   their  acts, 
proceedings,   and  contracts,  in  books  to  be  provided  for  that 
purpose,  and  shall  cause  to  be  kept  suitable  books  of  accounts 
and  vouchers  of  all  their  business  transactions,   which   books 
shall  at  all  times  be  open  to  the  inspection  of  any  of  said 
trustees. 

4.  The  said  trustees  shall  cause  a  monthly  statement  to  be 
made,  showing  the  amount  due  from  the   Union   Pacific   rail- 

9 


74  MONOPOLIES    AND    THE    PEOPLE. 

road  company  on  account  of  work  done  or  equipment  or  ma 
terial  furi.ished  under  the  contract,  according  to  the  estimates 
of  the  engineer  of  the  Union  Pacific  railroad  company,  as 
provided  in  said  contract,  a  copy  of  which  statement  shall  be 
furnished  to  the  Credit  Mobilier  of  America. 

And   the  above  transfer  and  conveyance  of  said  contract  is 
made  upon  the  further  trust  and  condition  : — 

1.  That  in  case  of  death,  declination,  disability,  by  reason 
of  sickness  or  absence  from  the  country  for  the  space   of  six 
months,  or  neglect  to  fulfil  the  duties  and  obligations  of  said 
trust  for  the  same  timo  by  either  of  said  trustees,  the  remain- 
^ng  or  surviving  trustees^may  declare  the  place  of  said  trustee 
to  be  vacant,  and  to  fill  such  vacancy  by  vote  in  manner  afore 
said. 

2.  That  in  case  any  one  of  said  trustees  shall  wilfully  neg 
lect  or  evade  the  performance  of  his  duties  as  such  trustee,  or 
shall  wilfully  attempt  to  hinder,  delay,  obstruct,  or  interfere 
with  the  execution  or  performance  of  said  contract,  or  the  due 
execution  or  performance  of  said  trust  and  conditions,  accord 
ing  to  the  true  intent  thereof,  or  shall  appropriate  to  his  own 
use  or  benefit  any  money  or  other  valuable  thing  belonging 
or  appertaining  to  said  trust,  fund,  or  property,  he  shall  not  be 
entitled  further  to  act  as  such  trustee,  or  to  receive  any  of  the 
benefits  of  said  trusts,   either  as  shareholder  in  said  Credit 
Mobilier  of  America,  or  otherwise. 

The  parties  of  the  second  part  de  hereby  accept  the  said 
trust,  and  agree  faithfully  to  execute  and  perform  the  same  ac 
cording  to  the  terms,  conditions,  and  limitations  herein  set 
forth. 

The  party  of  the  third  part,  in  consideration  of  the  premises, 
hereby  agree  to  advance,  as  upon  a  loan,  to  the  said  parties  of 
the  second  part,  their  survivors  and  successors,  all  such  sums 
of  money,  and  at  such  times  as  may  be  necessary,  to  enable 
said  trustees,  economically  and  promptly,  to  execute  and  per 
form  the  conditions  of  said  contract,  upon  the  call  of  said  par 
ties  of  the  second  part,  their  survivors  and  successors,  such 
sums  never  to  exceed  in  the  whole  the  amount  provided  for 
in  said  contract,  to  be  paid  by  the  Union  Pacific  railroad  com 
pany,  for  the  execution  Jand  performance  thereof,  and  to  re 
ceive  therefor  interest  at  the  rate  of  seven  per  cent  per  annum* 


THE    CREDIT    MOBILISE,    AND   A    VILLAINOUS    CONTRACT.         75 

payable  semi-annually,  on   each  sum   so  advanced,  until  the 
same  are  repaid. 

And  said  party  of  the  third  part  do  further  agree,  for  the 
consideration  aforesaid,  and  for  an  amount  equal  to  two  and 
one-half  per  cent  on  the  amount  to  be  by  them  advanced,  to 
be  paid  to  them  as  commission,  to,  and  do  hereby  guarantee 
unto,  the  parties  of  the  first  part  and  second  part,  the  due  per 
formance  and  execution  of  the  said  contract,  according  to  its 
terms  and  conditions,  and  do  indemnify  and  hold  harmless  the 
said  parties  of  the  first  and  second  part  of  and  from  all  cost? 
liability,  loss  or  damage  to  them,  or  either  of  them,  arising 
from  or  on  account  of  said  contract,  and  to  the  faithful  per 
formance  of  the  agreement,  contracts,  and  conditions  herein 
above  specified  to  be  done  and  performed  by  each. 

And  this  conveyance  and  transfer  is  made  upon  the  further 
trust  and  condition. 

That  the  trustees  shall  adjust  and  pay  over  to  the  Credit 
Mobilier  of  America  such  portion  of  the  net  profits  of  the 
work  done  and  material  furnished  on  the  first  one  hundred 
miles  west  of  the  one-hundredth  meridian,  as  was  done  and 
performed  prior  to  January  1,  1867. 

In  witness  whereof,  the  party  of  the  first  part,  the  several 
parties  of  the  second  part,  in  their  own  proper  persons,  have 
hereunto  set  their  hands  and  seals,  and  the  party  of  the  third 
part  has  caused  these  presents  to  be  executed  by  its  president, 
attested  by  its  secretary  with  the  seal  of  the  said  company,  on 
the  day  and  year  above  written. 

CAKES  AMES, 
THOMAS  C.  DURANT, 
OLIVER  AMES, 
JOHN  B.  ALLEY, 
SIDNEY  DILLON, 
CORNELIUS  S.  BUSHNELL, 
H.  S.  McCoMB. 
BENJAMIN  E.  BATES. 

Signed,  sealed,  and  delivered  in-  presence  of  CLARK  BELL. 
The  Credit  Mobilier  of  America,  by  its  president, 

SIDNEY  DILLON. 
Attest:     BENJAMIN  F.  HAM, 

Assistant  Secretary. 


76  MONOPOLIES    AND   THE    PEOPLE. 

The  first  noticeable  feature  of  this  instrument  is  that  the 
directors  of  the  company  contract  with  one  of  their  own  body 
to  build  six  hundred  and  sixty-seven  miles  of  its  road. 

Second,  that  they  agree  to  pay  to  one  of  their  own  body 
nearly  double  the  actual  cost  of  the  work.  Aside  from  these 
facts,  nothing  striking  appears  in  the  contract.  It  is  dated 
August  16,  1867.  It  was  approved  by  the  directors,  and  on 
the  15th  of  October  following,  only  two  months  after  its  exe 
cution,  it  was  assigned  to  the  seven  trustees  for  the  considera 
tion  of  one  dollar  and  diverse  other  good  and  valuable  consid 
erations.  These  trustees  agree  to  perform  Oakes  Ames'  con 
tract,  but  upon  consideration  that  they  shall  hold  all  the  avails 
and  proceeds  of  the  contract,  reimburse  themselves  and  the 
Credit  Mobilier  for  all  money  expended  on  said  contract,  with 
interest  and  commission,  and  reserve  to  each  of  themselves 
$3,000  per  year  for  services.  The  trustees  are  to  hold  all  of 
the  residue  for  the  several  persons  possessing  and  owning 
stock  in  the  Credit  Mobilier,  or  to  their  assigns,  but  upon  con 
dition  that  all  stockholders  in  the  Pacific  railroad  company, 
who  own  stock  in  the  Credit  Mobilier,  shall  give  an  irrevoca 
ble  proxy  for  their  railroad  stock  to  the  trustees  named  in  the 
agreement.  The  Credit  Mobilier  is  to  advance  at  seven  per 
cent  the  money  necessary  for  the  prosecution  of  the  work,  and 
for  a  commission  of  two  and  one-half  per  cent,  agrees  to  save 
harmless  the  parties  of  the  first  and  second  part  from  all  loss 
or  damages  to  them,  or  either  of  them,  arising  from,  or  on  ac 
count  of,  said  contract.  The  contracting  parties  are  all  stock 
holders  and  directors  in  the  railroad  company,  and  in  the 
Credit  Mobilier  (whatever  that  may  be)  they  are  trustees  for 
themselves.  They  loan  to  themselves  the  money  they  receive 
as  a  grant  from  government  (voted  to  the  railroad  corporation 
while  a  part  of  their  own  members  were  members  of  congress); 
they  pay  themselves  seven  per  cent  interest  for  loaning  to 
themselves  their  own  money;  also,  two  and  one-half  per  cent 
commission  for  furnishing  this  money,  donated  by  govern 
ment,  to  themselves,  besides  $3,000  per  year,  each  to  them 
selves  for  their  services  in  this  most  extraordinary  transaction. 
In  order  to  have  funds  with  which  to  compensate  themselves, 
they  issue  the  first  mortgage  bonds  on  the  road  of  the  Union 


THE    CREDIT    MOBILIER,    AND    A    VILLAINOUS   CONTRACT.         77 

Pacific  company  to  the  amount  of  many  millions,  and  then  ask 
congress  to  relieve  them  from  interest  on  the  bonds  received 
from  government;  and  congress,  composed  in  part  of  the  per 
sons  signing  the  above  quoted  contract  and  assignment,  re 
lieves  the  company  from  $3, 125, 000  per  year,  for  thirty  "years, 
and  taxes  the  people  with  this  vast  sum,  because  the  govern 
ment  requires  "a  more  safe  and  speedy  transmission  of  the 
mails,  troops,  &c.,  across  the  territories  to  the  Pacific  coast." 
We  have  nothing  to  do  with  the  financial  operations  of  this 
company,  only  as  far  as  the  people  are  affected  by  them.  Bear 
ing  in  mind  that  the  eight  persons  concerned  in  and  signing 
this  contract  and  assignment,  were  all  directors  of  the  Union 
Pacific  railroad  company;  that  four  of  them  were  the  execu 
tive  committee;  that  one  of  them  was  the  contractor,  and  all 
of  them  stockholders  in  the  Credit  Mobilier,  probably  at  that 
time  constituting  that  entire  corporation;  and  that  seven  of 
them  were  trustees  for  some  persons,  company,  or  corpora 
tion,  or  what  appears  still  more  probable,  for  themselves,  and 
Oakes  Ames,  the  contractor,  and  we  can  account  for  the  whole 
sale  robbery  of  the  people,  perpetrated  by  these  eight  men 
with  the  aid  of  congress,  as  above  shown. 

But  how  the  five  non-stockholding  directors,  appointed  by 
the  president,  who  are  presumed  to  act  for  the  government 
and  its  interest,  could  have  been  ignorant  of  the  whole  matter, 
is  not  so  easily  understood.  The  act  of  congress  of  July  2, 
1864,  section  13,  provides: 

"That  at  least  one  of  said  government  directors  shall  be 
placed  on  each  of  the  standing  committees  of  said  company, 
and  at  least  one  on  every  special  committee  that  may  be  ap 
pointed.  The  government  directors  SHALL  from  time  to  time 
report  to  the  secretary  of  the  interior,  in  answer  to  inquiries 
he  may  make  of  them  touching  the  condition,  management, 
and  progress  of  the  work,  and  shall  communicate  to  the  secre 
tary  of  the  interior,  at  the  same  time,  such  information  as 
should  be  in  the  possession  of  the  department.  They  shall,  as 
often  as  may  be  necessary  for  a  full  knowledge  of  the  condi 
tion  and  management  of  the  line,  visit  all  portions  of  the  line 
of  road,  whether  built  or  surveyed,  and  while  absent  from 
home,  attending  to  their  duties  as  directors,  shall  be  paid  their 


78  MONOPOLIES    AND    THE    PEOPLE. 

actual  traveling  expenses,  and  be  allowed  and  paid  such  rea 
sonable  compensation  for  their  time  actually  employed  as  the 
board  of  directors  may  decide." 

If  these  government  directors  and  the  company  observed 
the  law,  then  one  of  them  was  on  the  executive  committee  of 
the  Union  Pacific  company  and  must  have  known  of  this 
fraudulent  contract  and  its  assignment.  If  no  one  of  them 
was  placed  on  the  executive  committee,  then  in  the  discharge 
of  their  duty  they  should  have  reported  the  facts  to  the  secre 
tary  of  the  interior.  One  of  two  inferences  is  irresistible. 
1st.  That  they  were  ignorant  of  what  it  was  their  duty  to  know, 
or  2nd.  That  they  were  unfaithful  to  the  public  trust  confided 
in  them. 

Follow  us  a  little  further  into  this  Credit  Mobilier  organiza 
tion.  It  was  first  organized  in  Pennsylvania  as  the  Pennsyl 
vania  Fiscal  Agency  for  the  buying  and  selling  of  railroad 
bonds,  advancing  loans  to  railroads  and  contractors,  and  to  do 
almost  any  kind  of  business  except  banking.  The  charter  was 
granted  in  1860,  to  Dutf  Green  and  some  fifteen  others,  but 
included  none  of  the  Credit  Mobilier  company.  In  1864  (the 
corporation  having  done  nothing  up  to  this  time)  the  secretary 
of  the  company,  supposing  DufiP  Green  (the  president)  to  be 
dead,  sold  out  the  charter  to  George  Francis  Train,  Thos.  C. 
Durant,  Cakes  Ames,  Oliver  Ames,  and  others,  and  Train  bap 
tized  it  with  the  new  name  of,  "  The  Credit  Mobilier  of  Amer 
ica;"  and  then  George  Francis  seems  to  have  disappeared.  It 
does  not  appear  that  any  considerable  amount  of  the  capital 
stock  was  ever  paid  in  (the  whole  capital  stock  being  $5,000,- 
000 ;)  perhaps  just  sufficient  to  legalize  their  operations,  to- wit, 
$25,000.  The  first  business  done,  of  which  there  is  any  record, 
was  a  contract  made  by  the  directors  of  the  Union  Pacific  com 
pany  with  one  Hoxie,  of  Iowa,  for  building  247  miles  of  the 
road,  at  what  price  per  mile  we  cannot  learn.  It  was  not  in 
tended  that  Hoxie  should  build  this  road,  but,  as  the  directors 
of  the  company  could  not  contract  with  themselves,  it  was 
arranged  to  contract  with  Hoxie,  and  then  to  set  the  Credit 
Mobilier  to  "  running,"  and  divide  the  spoils.  With  the  con 
sent  of  the  executive  committee  of  the  company,  Hoxie  assigned 
his  contract  to  the  Credit  Mobilier.  The  first  mortgage  bonds 


THE    CREDIT    MOBILIER,    AND    A    VILLAINOUS    CONTRACT.          79 

of  the  company  were  sold  and  sufficient  realized  to  build  forty 
miles  of  road  in  1865,  arid  in  1866  to  complete  the  Hoxie  con 
tract.  From  the  subsidy  bonds  received  from  government,  or 
from  some  other  and  unknown  source,  the  Credit  Mobilier,  in 
the  year  1867,  reported  a  paid-up  capital  stock  of  §3,750,000, 
and  were  ready  for  extensive  operations.  In  pursuance  of  the 
plan  formed  by  the  executive  committee  of  the  railroad  com 
pany  and  the  owners  and  directors  of  the  Credit  Mobilier,  the 
contract  with  Cakes  Ames  herein  copied  was  made,  and  then 
assigned.  The  Credit  Mobilier  was  so  used  as  to  do  good.  It 
was  "  placed  where  it  would  do  the  most  good."  It  does  not 
appear  that  this  corporation  had  any  considerable  financial 
transactions,  or  did  any  particular  business  save  in  connection 
with  the  Pacific  road ;  yet  it  proved  to  the  holders  the  most 
Drolific  stock  of  any  on  record.  The  Ames  contract  was  as 
signed  to  Sidney  Dillon,  arid  others,  trustees,  on  the  15th  of 
October,  1867.  It  declared  dividends  as  follows : 
Dec.  12,  1867,  Union  Pacific  R.  R  bonds,  valued  at  $2,700,000 
Jan.  3,  1868,  "  "  637,500 

June  17,  1868,      "  "  "         "  "  525,000 

June  17,  1868,  cash 2,250,000 

July8,  1868,        "    1,125,000 


Total  of  dividends  in  seven  months $7,237,500 

In  addition  to  the  above,  another  dividend  was  declared  July 
3d,  1868,  of  $2,390,625  in  bonds,  which  were  pronounced  bo 
gus,  or  worthless.  It  is  thus  seen  that  the  directors  of  the  Pa 
cific  railroad  company,  who  were  also  the  Credit  Mobilier — 
trustees  for  themselves,  and  some  of  them  members  of  con 
gress — by  the  aid  of  congressional  legislation,  and  the  fiction 
of  the  Credit  Mobilier,  contracted  with  themselves,  agreeing 
to  pay  themselves  extravagant  prices  for  building  their  own 
road,  and  getting  their  pay  as  a  donation  from  the  public  treas 
ury,  and  were  able  in  seven  months  to  declare  dividends  to 
themselves  of  nearly  two  hundred  per  cent  upon  the  reported 
paid  up  capital,  which  capital  was  also  obtained  from  govern 
ment.  If  the  reader  has  followed  us  in  the  statements  we  have 
made  relative  to  the  land  and  bond  subsidies  granted  to  the 
Pacific  railroad  companies,  he  will  not  wonder  that  the  indebt- 


80  MONOPOLIES    AND    THE    PEOPLE. 

edness  of  these  companies,  after  the  completion  of  the  roads, 
and  after  the  receipt  from  government  of  more  than  their  en 
tire  cost,  nearly  doubles  the  amount  necessary  to  build  them, 
had  honesty  and  economy  been  used  in  their  construction. 

We  might  pursue  this  subject  further,  but  we  think  enough 
has  been  shown  to  convince  the  impartial  reader,  that  what 
ever  the  pretence  for  making  these  grants,  the  real  object  has 
been  to  enrich  unscrupulous  and  dishonest  men  at  the  expense 
of  the  public ;  and  that  this  corrupting  power  has  become  so 
great  that  those  who  occupy  high  and  responsible  places  in  the 
government  have  become  partners  in  these  wholesale  robberies  of 
the  people.  This  conclusion  becomes  irresistible  when  we  find 
members  of  congress  voting  government  aid  to  railroad  com 
panies  in  which  they  are  stockholders  and  directors  at  the  time 
the  aid  is  voted. 


CHAPTER  VIII. 

HAS  CONGRESS    THE    POWER,  UNDER    THE  CONSTITUTION,  TO    CREATE 


TO  answer  this  question  intelligently,  we  must  examine 
the  powers  granted  to  the  United  States,  as  well  as  the 
rights,  powers,  and  relative  duties  of  the  state  govern 
ments.  The  state  governments  are  supreme  in  all  matters 
affecting  the  public  and  the  people,  save  in  those  which,  by 
the  expressed  provisions  of  the  constitution,  are  delegated  to, 
or  conferred  upon,  the  general  government.  The  powers  thus 
delegated  to  the  general  government  are  all  of  a  public  char 
acter,  such  as  states  individually  could  not  control  or  execute, 
and  such  as  were  deemed  essential  to  our  national  existence. 
All  privileges,  rights,  and  powers,  not  deemed  essential  to  the 
successful  administration  of  the  national  government,  were 
reserved  to  the  states  and  to  the  people.  It  follows  that  the 
general  government  is  one  of  limited  powers ;  that  while  it  is 
supreme  in  all  matters  delegated  to  it  by  the  constitution,  and 
while  in  its  several  departments  it  can  exercise  all  such  implied 
powers  as  are  necessary  for  the  complete  execution  of  those 
expressly  delegated,  neither  the  executive,  legislative,  nor  judi 
cial  departments  can  assume  the  exercise  of  powers  not  con 
ferred  upon  them  by  the  express  provisions  of  the  constitu 
tion;  and  that  while  the  state  governments  can  exereise  all 
powers  not  expressly  prohibited  in  their  constitutions,  because 
of  their  general  sovereign  character,  the  general  government 
is  limited  to  such  as  are  expressly  granted.  If  these  proposi 
tions  are  correct,  then  the  general  government  has  no  author 
ity  for  creating  private  corporations. 

We  are  aware  that  congress  has  assumed  the  negative  of 
these  propositions,  and  has  granted  charters  to  some  of  the 
most  gigantic  corporations  of  the  country,  under  which  char- 

10 


82  '    MONOPOLIES   AND   THE    PEOPLE. 

ters  they  have  organized  and  are  doing  business  in  states 
which,  according  to  our  interpretation  of  the  constitution,  as 
above  stated,  should  have  the  absolute  control  of  such  compa 
nies.  We  shall  attempt  to  demonstrate  that  the  acts  of  con 
gress  granting  charters  to  railroad  and  other  private  corpora 
tions  are  usurpations  of  power,  in  conflict  with  the  provisions 
of  the  constitution,  destructive  of  the  rights  of  the  people  and 
of  republican  government. 

What  are  the  powers  delegated  to  the  general  government 
by  the  constitution  in  questions  of  this  character  ?  Article  I. 
Section  8,  contains,  fonong  others,  the  following,  as  some  of 
the  powers  conferred  upon  congress :  "  To  regulate  commerce 
with  foreign  nations,  and  among  the  several  states,  and  with 
the  Indian  tribes ;  "  "  To  establish  post  offices  and  post 
roads ;  "  "  To  make  all  laws  which  shall  be  necessary  and 
proper  for  carrying  into  execution  the  foregoing  powers  and 
all  other  powers  vested  by  this  constitution  in  the  government 
of  the  United  States,  or  in  any  department  or  office  thereof." 
The  same  section  gives  congress  power  to  provide  for  orga 
nizing  the  army,  &c. ;  and,  in  time  of  war,  extraordinary  pow 
ers,  controlled  only  by  the  necessities  of  the  case,  are  vested 
in  congress.  If  congress  have  power  under  the  constitution 
to  charter  private  corporations,  it  must  be  derived  from,  or 
contained  in,  the  provisions  above  quoted.  Article  IX.  of  the 
constitution  reads  as  follows  :  "  The  enumeration  in  the  con 
stitution  of  certain  rights  shall  not  be  construed  to  deny  or 
disparage  others  retained  by  the  people."  And  Section  10 
reads  as  follows  :  "  The  powers  not  delegated  to  the  United 
States  by  the  constitution,  nor  prohibited  by  it  to  the  states, 
are  reserved  to  the  states  respectively,  or  to  the  people."  And 
the  framers  of  the  constitution  it  would  seem,  for  the  purpose 
of  making  the  line  of  demarcation  between  the  powers  of  the 
states  and  the  general  government  still  more  plain  and  defi 
nite,  provided  as  follows  :  Article  IV.,  Section  2  :  "  The  citi 
zens  of  each  state  shall  be  entitled  to  all  privileges  and  immu 
nities  of  citizens  in  the  several  states." 

We  think  that  the  above  quotations  from  the  constitution 
(and  we  have  quoted  all  having  any  relation  to  the  question 
we  are  discussing)  prove  conclusively  that  the  powers  con- 


CONGRESSIONAL    POWER   OVER    CORPORATIONS.  83 

ferred  upon  congress  by  the  constitution  are  limited ;  that 
while  within  the  scope  of  the  delegated  powers  its  action  is 
supreme,  there  is  inherent  in  it  no  general  power  to  legislate 
upon  subjects  not  named  in  the  constitution,  or  not  included 
by  necessary  implication.  On  the  contrary,  all  the  powers 
not  expressly  given  are  reserved  to  the  states  or  to  the  people. 

Is  the  authority  to  charter  private  corporations  necessarily 
included  in  the  delegated  power  to  regulate  commerce  among 
the  several  states,  or  to  establish  post  roads  ?  We  think  not. 
What  do  we  understand  by  the  word  u  Commerce  ?  "  Web 
ster  defines  it  as  follows  :  "  1st.  In  a  general  sense,  an  inter 
change  or  mutual  change  of  goods,  wares,  productions,  or 
property  of  any  kind  between  nations  or  individuals,  either  by 
barter,  or  by  purchase  and  sale  ;  trade ;  traffic.  Commerce  is 
foreign,  or  inland.  Foreign  commerce  is  the  trade  which  one 
nation  carries  on  with  another;  inland  commerce,  or  inland 
trade,  is  the  trade  in  the  exchange  of  commodities  between 
citizens  of  the  same  nation  or  state.  2d.  Intercourse  between 
individuals;  interchange  of  work,  business,  civilities,  or 
amusements;  mutual  dealings  in  life."  And  again:  "To 
traffic;  to  carry  on  trade."  In  the  absence  of  any  definition 
given  to  it  in  the  constitution,  we  must  accept  the  above  gen 
eral  definition  of  its  meaning  as  being  the  sense  in  which  it  is 
used  in  the  constitution. 

Respecting  trade  with  foreign  nations  or  the  Indian  tribes, 
it  can  only  relate  to  the  interchange  of  commodities,  or  pur 
chase  or  sale  of  articles  of  traffic.  As  incidental  to  this 
power,  congress  can  prescribe  rules  for  the  regulation  of  navi 
gation  upon  the  high  seas,  including  police  regulations  on 
board  of  vessels,  because  the  oceans  are  the  common  or  public 
highways  of  all  nations,  and  each  nation  navigating  the  same, 
is  bound  to  protect  not  only  its  commerce,  but  its  citizens  or 
subjects.  Nations  hold  commerce  with  nations  across  and 
upon  the  high  seas,  the  citizens  and  subjects  of  each  being, 
protected  by  their  own  government.  This  commerce  with 
foreign  nations  is  not  regulated  by  grants  of  private  charters, 
but  by  acts  of  congress  is  open  to  all  alike,  save  where,  for  the 
encouragement  of  certain  branches  of  trade,  certain  bounties 
or  privileges  have  been  granted  to  particular  parties  for  a 


84  MONOPOLIES   AND   THE    PEOPLE. 

specified  time.  But  all  such  grants  have  been  to  parties  navi 
gating  the  high  seas.  The  control  of  navigable  streams  with 
in  the  United  States  does  not  depend  alone  upon  the  powers 
given  to  congress  to  regulate  the  commerce  of  the  country, 
but  depends  also  upon  the  farther  power  vesting  in  the  gener 
al  government  exclusive  maritime  jurisdiction.  If  we  concede 
that  the  power  to  regulate  commerce  among  the  several  states 
gives  congress  the  exclusive  right  to  regulate  the  commerce 
carried  on  upon  our  rivers,  it  would  not  follow  that  the  power 
to  charter  railway  companies  is  conferred.  Navigable  streams 
are  public  highways,  open  to  the  travel  of  all.  No  man,  set  of 
men,  or  corporations,  can  claim  the  exclusive  right  to  navigate 
these  rivers,  nor  could  congress  grant  such  exclusive  right. 
The  duty  of  protecting  the  rights  of  the  citizen,  and  of  making 
river  transportation  safe,  and  of  protecting  the  rights  of  prop 
erty,  demand  that  the  national,  and  not  the  state  legislature, 
should  be  supreme  in  this  particular  jurisdiction,  and  hence 
this  branch  of  commerce  is  placed  in  the  custody  of  the  nation. 
But  keeping  in  mind  the  definition  of  the  word,  "  Commerce," 
let  us  see  what  is  meant  by  the  term  as  applied  to  dealings  be 
tween  the  states.  We  insist  that  it  has  no  reference  to  the 
construction  of  roads,  railroads,  canals,  or  any  other  ways 
upon  which  commerce  might  be  carried,  or  over  which  articles 
of  trade  or  traffic  might  pass,  but  that  it  refers  only  to  the 
dealing  of  the  people  of  one  state  with  another;  that  while 
the  people  of  each  state  are  under  the  supreme  control  of 
their  state  authority,  all  the  privileges  enjoyed  by  the  citizens 
of  any  one  of  the  states  as  to  residence  or  traffic  with  the  citi 
zens  of  another  state,  are  to  be  the  same.  No  distinction  can 
be  made,  and  for  the  purpose  of  carrying  out  this  provision  of 
the  constitution,  and  preventing  the  levy  of  tariffs  or  taxes  by 
one  state  upon  the  citizens  of  another  state,  and  for  the  pur 
pose  of  guaranteeing  to  all  citizens  of  the  United  States  im 
munity  from  these  unjust  discriminations,  the  power  to  regu 
late  commerce  among  the  states  was  delegated  to  congress. 
NOT  does  it  follow,  that,  for  the  purpose  of  regulating  com 
merce  among  the  states,  congress  can  grant  exclusive  privileges 
and  monopolies  in  any  business  not  confined  to  one  state. 
When  the  constitution  was  adopted,  each  state  was  indepen- 


CONGRESSIONAL    POWER    OVER   CORPORATIONS.  85 

dent;  each  had  all  the  powers  and  prerogatives  of  a  nation; 
each  was  supreme  within  its  geographical  limits;  each  might 
prescribe  its  own  rules  in  relation  to  immigrants,  and  to  trade 
and  traffic  with  other  states ;  it  might  discriminate  in  favor  of 
its  own  citizens ;  it  might  impose  tariffs  on  foreign  imports, 
and  deal  with  its  sister  states  as  with  foreign  nations.  To 
prevent  this,  and  to  secure  to  all  citizens  of  the  United  States 
equal  priviliges  and  immunities  in  all  parts  of  the  United 
States,  the  provisions  of  the  constitution  we  have  quoted  were 
adopted.  While  the  independence  of  the  states  was  recognized 
and  preserved,  the  power  to  regulate  commerce,  among  them, 
was  delegated  to  congress  ;  not  the  power  to  withdraw  from 
the  state  its  right  to  legislate  upon  the  subject  of  commerce 
among  its  own  citizens,  or  the  right  to  protect  its  own  citizens 
in  their  dealings  with  the  citizens  of  other  states ;  but  simply 
providing  that  no  discriminations  should  be  made  on  account 
of  residence,  and  establishing  equal  rights  and  privileges  of  all 
citizens  of  the  United  States  in  all  the  states,  free  from  dis 
criminations  sought  to  be  enforced  under  local  or  state  stat 
utes  and  regulations.  Should  any  one  state  attempt  to  deny 
to  the  people  of  another  state  the  privileges  guaranteed  by  the 
constitution,  then  it  would  be  the  plain  duty  of  congress  to 
interfere  and  "  regulate  commerce  "  between  these  states.  But 
while  a  general  national  law  might  constitutionally  be  enacted 
upon  this  subject,  it  certainly  cannot  be  claimed,  that  upon  the 
pretext  of  regulating  commerce  among  the  states,  congress 
can  charter  railroad  companies,  or  any  other  companies 
organized  for  pecuniary  profit.  Nor  can  this  power  be 
claimed  under  the  constitutional  provision  for  the  establish 
ment  of  post  offices  and  post  roads.  We  admit  that  the  grant 
of  this  power  carries  with  it  all  such  as  are  incidental;  that  by 
implication  it  includes  within  its  terms  the  carrying  and  dis 
tribution  of  the  mails,  and  all  other  matter  necessarily  con 
nected  therewith;  and  that  congress  might  build,  own,  and 
control  post  roads,  so  far  as  the  same  might  be  found  necessary 
for  the  transportation  of  the  mails  over  the  territory  belonging 
to  the  United  States,  and  to  provide  for  the  use  of  public  roads 
for  government  purposes.  Public  highways  are  free  to  all. 
Over  these  highways,  whether  on  land  or  water,  congress 


86  MONOPOLIES   AND   THE   PEOPLE. 

can  provide  for  the  transportation  of  the  mails,  troops,  army 
stores,  munitions  of  war,  and  other  public  property.  These 
highways  are  at  all  times  open  to  the  public.  But  while  this 
is  true,  it  does  not  follow  that  the  government  of  the  United 
States  can  take  the  absolute  control  of  these  public  highways, 
and,  by  act  of  corgress,  deny  the  states  a  control  over  those 
within  their  borders  respectively.  The  location  and  estab 
lishment  of  public  roads  within  a  state  is  a  part  of  the  local  or 
police  regulation,  and  while  these  roads  are  free  to  the  passage 
of  all,  they  are,  by  the  provisions  of  the  constitution  and  the 
universally  accepted  custom  of  the  country,  recognized  as 
being  under  the  exclusive  control  of  the  states  within  which 
they  are  situated.  The  fact  that  congress  never  has  taken  the 
control  of  the  public  roads  of  the  country  is  a  full  recognition 
of  the  exclusive  right  of  the  states  to  control  them.  Then  how 
can  it  be  claimed  that  congress,  under  the  constitution,  pos 
sesses  the  power  to  charter  railroad  companies  ?  Until  within 
the  last  few  years,  no  attempt  was  made  to  grant  charters  to 
railroad  companies  by  the  general  government,  nor  indeed 
were  charters  granted  for  any  purpose  save  in  relation  to  the 
financial  departments,  as  in  the  case  of  United  States  banks, 
fiscal  agencies,  &c.,  which  were  chartered  for  the  public  bene 
fit,  and  not  as  private  institutions.  We  are  not  positive  that 
the  constitutionality  of  these  railroad  charters  has  been  de 
termined  by  the  courts  of  the  United  States,  but  we  are  aware 
of  the  fact  that  congress  has  deemed  it  necessary,  in  almost 
every  instance  where  charters  have  been  granted  and  aid 
voted,  to  declare,  and  place  upon  the  record  as  a  part  of  the 
charter,  the  reasons  for  granting  it.  The  following  are  the 
reasons  assigned  in  some  of  the  charters,  to- wit :  In  the  char 
ter  of  the  Union  Pacific  railroad  company — "  For  the  purpose 
of  aiding  in  the  construction  of  said  railroad  and  telegraph 
line,  and  to  secure  the  safe  and  speedy  transportation  of  the  mails, 
troops,  munitions  of  war,  and  public  stores  thereon" 

In  the  charter  of  the  Northern  Pacific  railroad  company : 
"  For  the  purpose  of  aiding  in  the  construction  of  said  railroad 
and  telegraph  line  to  the  Pacific  coast,  and  to  secure  the  safe 
and  speedy  transportation  of  the  mails,  troops,  munitions  of  war,  and 
public  stores"  In  all  other  cases  the  above  quoted  statement 


CONGRESSIONAL    POWER    OVER    CORPORATIONS.  87 

of  cause  is  inserted  in  the  charters,  as  though  the  right  or  au 
thority  to  make  these  grants  was  so  doubtful  that  it  became 
necessary  in  every  case  to  state  the  reason  for  the  grant.  If 
the  present  necessities  of  the  government  demand  such  special 
legislation,  then  the  same  reasons  existed  from  the  organiza 
tion  of  our  government ;  and  if  congress  possesses  the  power 
under  the  constitution  to  make  these  grants,  and  to  assume  the 
absolute  control  of  public  or  private  roads  through  the  states, 
then  from  the  adoption  of  that  constitution  congress  could 
have  taken  the  absolute  control  of  all  the  public  roads  in  all 
the  states  of  the  Union.  Before  railroads  were  constructed, 
all  overland  transportation  of  mails,  troops,  munitions  of  war, 
<fec.,  was  over  the  public  highways — highways  that  were  and 
still  are  under  the  exclusive  control  of  the  states  in  which  they 
lie.  Over  these  public  roads  and  such  private  ways  as  maybe 
selected,  government  has  a  right  to  transport  the  mails,  troops, 
and  public  property,  and  no  state  has  the  right  to  prohibit  or 
restrict  this  right.  Still,  no  power  is  given  by  the  constitution, 
nor  is  there  any  implied,  under  which  congress  can,  under  the 
plea  of  rendering  more  safe  and  speedy  the  transportation  of 
mails,  troops,  &c.,  grant  exclusive  charters  and  privileges  to 
private  corporations.  In  the  nature  of  things,  as  our  govern 
ment  is  organized,  the  right  to  charter  and  control  all  corpora 
tions  organized  for  pecuniary  profit  remains  with  the  states. 
This  power  has  never  been  delegated  to  the  general  govern 
ment,  nor  prohibited  to  the  states,  or  people.  There  can  be 
no  doubt  upon  this  point,  when  we  remember  that  the  general 
government  is  limited  to  the  delegated  powers ;  and  that  it  is 
supreme  only  in  those  matters  which  are  delegated  to  and 
vested  in  it  by  the  constitution.  This  position  is  fully  sustained 
by  the  adjudication  of  the  supreme  court  of  the  United  States. 
In  Marshall,  on  the  federal  constitution,  page  164,  we  find  the 
following:  "  This  government  is  acknowledged  by  all  to  be 
one  of  enumerated  powers.  The  principle  that  it  can  exercise 
only  the  powers  granted  to  it,  would  seem  too  apparent  to  have 
required  to  be  enforced  by  all  those  arguments  which  its  en 
lightened  friends,  while  it  was  depending  before  the  people, 
found  it  necessary  to  urge.  That  principal  is  now  universally 
admitted."  Again,  on  page  301,  the  author  says :  "  In  our 


88  MONOPOLIES    AND    THE    PEOPLE. 

complex  system  presenting  the  rare  and  difficult  scheme  of  one 
general  government  whose  action  extends  over  the  whole,  but 
which  possesses  only  certain  enumerated  powers  and  of  nu 
merous  state  governments,  which  retain  and  exercise  all 
powers  not  delegated  to  the  union,  contests  respecting  power 
must  arise.  Were  it  otherwise,  the  measures  taken  by  the  re 
spective  governments  to  execute  their  acknowledged  powers 
would  often  be  of  the  same  description,  and  might  sometimes 
interfere.  This,  however,  does  not  prove  that  the  one  is  exer 
cising,  or  has  the  right  to  exercise,  the  power  of  the  other." 

As  to  the  power  of  congress  to  create  corporations,  an  argu 
ment  has  been  drawn  in  its  favor  from  the  provision  of  the  con 
stitution,  which  declares  that  congress  shall  have  the  power  of 
making  "  all  laws  which  shall  be  necessary  and  proper  for  car 
rying  into  execution  the  foregoing  powers,  and  all  other  powers 
vested  by  this  constitution  in  the  government  of  the  United 
States,  or  in  any  department  thereof."  The  question  before 
the  court  arose  out  of  the  attempt  of  the  state  of  Maryland  to 
tax  the  United  States  bank,  a  corporation  chartered  by  con 
gress.  In  this  case  the  power  was  upheld  on  the  ground  that 
the  bank  was  necessary  in  the  administration  of  the  finances 
of  the  government,  that  being  one  of  the  matters  vested  in  or 
delegated  to  the  general  government,  the  power  to  charter  the 
bank  was  incidental  to  the  granted  power.  But  on  the  ques 
tion  of  the  power  of  congress  to  create  corporations,  Mr.  Mar 
shall  says,  page  167 :  "  The  creation  of  a  corporation,  it  is  said, 
appertains  to  sovereignty.  This  is  admitted.  But  to  what 
portion  of  sovereignty  does  it  appertain  ?  Does  it  belong  to 
one  more  than  another?  In  America  the  powers  of  sover 
eignty  are  divided  between  the  government  of  the  Union,  and 
those  of  the  states.  They  are  each  sovereign  with  respect  to 
the  objects  committed  to  it,  and  neither  sovereign  with  respect 
to  the  objects  committed  to  the  other.  We  cannot  compre 
hend  that  train  of  reasoning  which  would  maintain  that  the 
extent  of  power  granted  by  the  people  is  to  be  ascertained,  not 
by  the  nature  and  terms  of  the  grant,  but  by  its  date.  Some 
state  constitutions  were  formed  before,  some  since  that  of  the 
United  States.  We  cannot  believe  that  their  relation  to  each 
other  is  in  any  degree  dependent  upon  this  circumstance^ 


CONGRESSIONAL    POWER    OVER    CORPORATIONS.  89 

Their  respective  powers  must,  we  think,  be  precisely  the  same 
as  if  they  had  been  formed  at  the  same  time.  Had  they  been 
formed  at  the  same  time,  and  had  the  people  conferred  on  the 
general  government  the  power  contained  in  the  constitution 
and  on  the  states  the  whole  residium  of  power,  would  it  have 
been  asserted  that  the  government  of  the  union  was  not  sover 
eign  with  respect  to  those  objects  which  were  entrusted  to  it, 
in  relation  to  which  its  iaws  were  declared  to  be  supreme  ?  If 
this  could  have  been  asserted,  we  cannot  well  comprehend  the 
process  of  reasoning  which  maintains  that  a  power  appertain 
ing  to  sovereignty  cannot  be  connected  with  that  vast  portion 
of  it  which  is  granted  to  the  general  government,  so  far  as  it 
is  calculated  to  subserve  the  legitimate  objects  of  that  govern 
ment.  The  power  of  creating  a  corporation,  though  apper 
taining  to  sovereignty,  is  not  like  the  power  of  making  war,  or 
levying  taxes,  or  ot  regulating  commerce,  a  great  substantive 
and  independent  power  which  cannot  be  implied  as  incidental 
to  other  powers,  or  used  as  a  means  of  executing  them.  It  is 
never  the  end  for  which  other  powers  are  exercised,  but  the 
means  by  which  these  objects  are  accomplished.  No  contri 
butions  are  made  to  charity  for  the  sake  of  an  incorporation, 
but  a  corporation  is  created  to  administer  the  charity.  No 
Keminary  of  learning  is  instituted  in  order  to  be  incorporated, 
but  the  corporate  character  is  conferred  to  subserve  the  pur 
poses  of  education.  No  city  was  ever  built  with  the  sole  ob 
ject  of  being  incorporated,  but  it  is  incorporated  as  the  best 
means  of  being  well  governed.  The  power  of  creating  a  cor 
poration  is  never  used  for  its  own  sake,  but  for  the  purpose  of 
effecting  something  else.  No  sufficient  reason  is  therefore 
perceived  why  it  may  not  pass  as  incidental  to  those  powers 
which  are  expressly  given,  if  it  be  the  direct  mode  of  executing 
them." 

Taking  the  above  definition  of  corporations,  and  their  use, 
in  the  administration  of  the  government,  we  can  have  no  diffi 
culty  in  distinguishing  the  cases  in  which  congress  can  grant 
charters  to  any  company  or  association.  It  is  only  when  some 
of  the  delegated  powers  require  the  aid  of  corporate  acts  in 
their  administration,  that  the  right  exists  in  congress  to  grant 
charters,  as  incidental  to  the  grants.  The  grants  of  charters 
11 


90  MONOPOLIES  AND   THE   PEOPLE. 

to  railroad  companies  cannot  be  claimed  as  incidental  to  any 
express  delegation  of  power  to  the  general  government.     Jf 
railroads  are  private  property,  they  cannot  be  chartered  or  con 
trolled  by  congress.     If  they  are  to  be  taken  and  treated  as 
public  highways,  then  they  are  as  exclusively  under  and  sub 
ject  to  the  control   of  the  respective  state  governments,  as 
common  highways.     The  state  legislatures  have  exclusive  con 
trol  of  them  in  either  case.     If  they  are  treated  as  private  cor 
porations,  then  under  the  rights  reserved  to  the  states,  as  well 
as  by  long  usage,  their  exclusive  control  is  retained  by  the 
states.     If  they  are  public  roads,  the  same  local  or  state  laws 
apply  to  them  as  to  all  other  public  roads.     Admit  that  con 
gress  has  the  right  to  grant  charters  for  railroads,  then  it  fol 
lows  that  it  can  control  them.     Admit  that  they  are  public 
roads,  and  that  they  are  to  be  taken  and  treated  as  common 
highways,  and  congress  at  once  assumes  the  local  and  police 
regulations  of  all  the  public  roads  in  all  of  the  United  States. 
To  this  doctrine  we  cannot  subscribe,  but  insist  that  the  ex« 
elusive  power  to  charter  and  control  railroad  corporations  re 
mains  with  the  people  to  be  exercised  by  and  under  the  exclu 
sive   control    of  the  state  governments.      ISTor  can  congress, 
rightfully,   under   the  constitution,  charter  railroad  corpora 
tions  in  the  territories.     The  power  vested  in  congress  "  to 
dispose  of  and  make  all  needful  rules  respecting  the  territory 
or  other  property  belonging  to  the  United  States,"  does  not 
authorize  the  creation  of  private  monopolies.     When  territorial 
governments  are  formed,  they  are  clothed  with  many  of  the 
attributes  of  sovereignty.     These  governments  are  at  liberty 
to  legislate  and  to  provide  for  the  well-being  of  the  people, 
and  subject  to  the  provisions  of  their  "organic  law,"  have  the 
complete  control  of  local  and  police  regulations.     They  can 
construct  highways,  erect  public  buildings,  impose  taxes,  grant 
charters,  including  charters  to  railroad  companies.     That  terri 
torial  governments  can  charter  railroad  companies,  and  that 
general  government  has  so  acknowledged  is  proven  by  the  acts  of 
congress  in  donating  lands  and  bonds  to  companies  chartered 
by  territorial  legislation.     This  was  done  in  the  case  of  the 
Leavenworth,  Pawnee,  &  Western  railroad  company,  chartered 
by  the  *  territorial  legislature  of  Kansas;  and  other  instances 


CONGRESSIONAL    POWER    OVER    CORPORATIONS.  91 

are  common.  The  power  to  grant  charters  cannot  vest  in  the 
states,  and  territorial  governments,  and  at  the  same  time  exist 
in  the  general  government,  for  the  reason  that  the  supreme 
power  must  exist  in  one  or  the  other.  If  this  were  not  so,  one 
government  could  destroy  what  the  other  had  created.  The 
privileges  acquired  by  a  corporation  under  the  one  could  he 
entirely  annulled  by  the  other.  Private  rights  would  be  sub 
ject  to  the  adjudication  of  two  separate  and  distinct  tribunals, 
created  and  sustained  by  distinct  governments,  the  one  claim 
ing  to  be  supreme,  because  the  right  to  exercise  the  power  had 
been  granted  to  it,  and  the  other  denying  such  grant,  and  be 
cause  of  this  denial  claiming  the  power  as  still  remaining  with 
the  state  government.  This  course  would  be  destructive  of  the 
rights  of  the  people,  as  well  as  of  our  system  of  government. 
Concede  to  congress  the  right  to  charter  railroad  companies, 
and  there  is  no  limit  to  the  monopolies  that  can  be  forced  upon 
the  people  of  the  whole  country.  Land  companies,  loan,  and 
interest  companies,  manufacturing  companies,  and  in  short  all 
conceivable  projects  of  speculation  can  obtain  charters  from 
congress,  and  our  government  becomes  entirely  personal  in 
character,  without  restraint  or  constitutional  limit.  The  assump 
tion  by  congress  of  the  power  to  create  private  corporations  is 
a  fatal  stab  at  our  system  of  government,  destructive  of  state 
rights,  and  a  wanton  violation  of  the  constitution. 


CHAPTER  IX. 


STATE  RIGHTS  AT  THE  BAR  OF  A  CORRUPT  CONGRESS. 

NONE  of  the  subjects  of  legislation  have  tended  to  destroy 
constitutional  safeguards  and  debase  public  morals  so 
much  as  congressional  legislation,  with  its  grants  of  land 
and  bonds,  and  other  special  benefits  in  favor  of  railroad  cor 
porations.  This  species  of  legislation  has  well  riigh  destroyed 
republican  institutions.  While  our  government  is  republican 
in  name  it  is  in  fact  controlled  by  an  oligarchy.  The  whole 
government  has  become  a  prey  to  the  class  of  corporations 
above  named,  and  is  administered  in  their  interest.  Their 
influence  controls  the  legislative  department,  the  courts  of  the 
country,  and  its  finances.  This  is  a  sweeping  assertion,  but 
who  will  deny  it.  Further,  the  very  men  who  by  their  votes 
in  congress  have  created  these  monopolies,  have  themselves  in 
many  instances  received  pecuniary  consideration  for  their 
votes,  either  in  corporate  stock,  or  direct  payment.  This  last 
assertion  is  now  (January  9,  1873)  being  supported  by  results 
arrived  at  by  committees  appointed  to  investigate  charges  of 
corruption  made  against  members  of  both  branches  of  congress. 
Having  assumed  the  right  to  grant  charters  and  aid  to  these 
corporations  in  violation  of  the  constitution,  it  was  but  one 
step  further  in  the  same  direction  for  congress  to  enact  other 
unconstitutional  laws,  regulating  and  combining  railroads  re 
ceiving  their  charters  from  state  legislatures,  laws  which  en 
able  these  roads  to  so  combine  their  operations  as  to  control 
the  entire  interests  of  the  country.  These  acts  are  numerous 
in  the  published  laws  of  congress.  We  will  refer  to  some  of 
them,  and  direct  the  reader  to  the  following,  of  a  general 
nature :  On  the  15th  of  June,  1866,  congress  passed  the  fol 
lowing  unconstitutional  act  in  the  interest  and  for  the  benefit 
of  railroad  corporations :  See  Second  Brightley's  Digest, 


STATE  RIGHTS  AT  THE  BAR  OF  A  CORRUPT  CONGRESS.  93 

page  528,  "  That  every  railroad  company  in  the  United  States, 
whose  road  is  operated  by  steam,  its  successors  and  assigns, 
be  and  is  hereby  authorized  to  carry  upon  and  over  its  road, 
boats,  bridges,  and  ferries,  all  passengers,  troops,  government 
supplies,  mails,  freight,  and  property,  on  their  way  from  one 
state  to  another,  state,  and  to  receive  compensation  therefor, 
and  to  connect  with  roads  of  other  states  so  as  to  form  continu 
ous  lines  for  the  transportation  of  the  same  to  the  place  of 
destination.  Provided,  that  this  act  shall  not  affect  any  stipu 
lations  between  the  government  of  the  United  States,  and  any 
railroad  company  for  transportation  and  fares  without  com 
pensation,  nor  impair  or  change  the  conditions  imposed  by  the 
terms  of  the  acts  granting  lands  to  any  such  company  to  aid 
in  the  construction  of  its  road,  nor  shall  it  be  construed  to 
authorize  any  railroad  company  to  build  any  new  road,  or  con 
nection  with  any  other  road  without  authority  from  the  state 
in  which  said  railroad,  or  connection,  may  be  proposed." 
Commenting  upon  this  extraordinary  statute,  the  editor  says  : 
"In  the  preamble  to  this  extraordinary  assumption  of  power, 
on  the  part  of  the  federal  congress,  they  prefer  to  base  their 
authority  for  it  on  the  power  to  regulate  commerce  among  the 
several  states,  to  establish  post-roads,  and  to  raise  and  support 
armies.  But  it  has  been  decided  that  the  constitutional  power 
to  establish  post-roads  is  confined  to  such  as  are  regularly  laid 
out  under  state  authority ;  the  government  of  the  United 
States  cannot  construct  a  post-road  within  a  state  of  the  Union 
without  its  consent.  The  post-roads  of  the  United  States  are 
the  property  of  the  states  through  which  they  pass.  The 
United  States  have  the  mere  right  of  transit  over  them  for 
the  purpose  of  carrying  the  mails ;  the  government  could  not 
have  an  injunction  to  prevent  the  destruction  of  a  mail-road." 
Citing  the  case  of  the  Cleveland,  Painesville,  \  Ashtabula  rail 
road  company  vs.  The  Franklin  canal  company,  in  the  circuit 
court  of  the  United  States,  the  editor  adds  :  "  Congress  cer 
tainly  can  confer  no  rights  on  a  railroad  company  incorporated 
by  a  state  government,  which  are  withheld  from  it  by  the 
charter  of  its  creator." 

The  above  quoted  act  assumes  that  congress  has  full  power 
to  regulate  the  connection  of  railroads  in  the  different  states, 


94  MONOPOLIES   AND   THE    PEOPLE. 

as  well  as  the  carrying  trade  upon  the  same.  It  strips  the 
several  state  governments  of  all  power  to  interfere,  and  in  case 
of  any  controversy  takes  from  the  state  courts  the  power  to 
determine  the  rights  of  the  respective  parties ;  the  act  of  con 
gress  could  be  pleaded,  and,  as  a  necessary  consequence,  the 
United  States  courts  would  have  exclusive  jurisdiction.  It 
cannot  be  claimed  that  this  act  can  be  supported  under  any 
express  delegation  of  power  to  the  general  government,  nor 
can  it  be  supported  as  being  incidental  to  any  express  grant. 
It  is  an  usurpation  not  warranted  or  sustained  by  any  part  of 
the  constitution.  This  one  section  quoted,  destroys  the  right 
of  any  state  of  the  Union,  or  of  two  or  more  of  them,  to  leg 
islate  upon  the  subject  of  uniting  or  connecting  railroads 
meeting  on  the  lines  dividing  them,  and  also  takes  from  the 
states  the  right  to  regulate  the  carrying  trade  within  their  own 
respective  borders.  Congress  had  no  more  authority  under 
the  constitution  to  enact  this  law,  than  to  provide  by  statute 
for  the  construction  of  public  highways  when  they  meet  upon 
the  line  dividing  states,  or  to  provide  for  the  passage  of  teams 
from  one  state  to  another,  and  the  transportation  of  freights 
over  the  common  highways  within  or  across  a  state.  The 
whole  power  under  the  constitution  is  reserved  to  the  states. 
Prior  to  the  creation  of  these  great  railroad  monopolies  by 
congress,  an  attempt  at  such  legislation  would  have  been 
deemed  unconstitutional,  but  as  soon  as  the  whole  affairs  of 
government  passed  into  the  hands  of  the  few,  and  when  the 
protection  of  their  interests  demanded  it,  the  act  was  passed, 
and  has  remained  upon  the  statute  book  as  one  of  the  laws  of 
the  land.  This  act  is  about  the  only  one  that  openly  and 
broadly  covers  the  whole  ground,  and  assumes  to  regulate  the 
internal  affairs  of  the  states,  but  there  are  numerous  acts 
passed  in  relatio*n  to  land  grants  and  the  companies  chartered 
by  congress,  which  have  the  same  effect.  In  some  cases  the 
absolute  control  of  roads  constructed  under  charters  obtained 
from  state  legislatures,  or  under  state  laws,  has  been  taken 
from  the  states  by  acts  of  congress,  and  placed  under  the  juris 
diction  of  the  general  government.  In  most  instances  where 
this  has  been  done,  members  of  congress,  or  their  near  rela 
tives,  were  large  owners  of  stock  in  the  companies  to  be  bene- 


STATE  EIGHTS  AT  THE  BAB  OP  A  CORRUPT  CONGRESS.  95 

fited  by  the  act.  To  speak  more  plainly,  the  acts  granting 
special  privileges  to  particular  companies,  and  placing  them 
under  the  jurisdiction  of  the  federal  government,  were  passed 
for  the  benefit  of  congressmen  and  others  in  high  official  posi 
tion.  Let  us  examine  some  of  these  acts.  Among  the  stock 
holders  and  directors  of  the  Union  Pacific  and  its  branches, 
there  are  found  at  least  eight  persons  who  were  members  of 
congress  at  the  date  of  the  act  of  congress  creating  the  cor 
poration,  and  also  at  the  date  of  the  material  amendments  to 
the  charter.  Some  of  these  congressmen  are  still  stockholders 
and  directors,  and  were  directors  when  congress  released  these 
companies  from  payment  of  interest  on  the  bonds  they  had 
received  from  the  government.  Another  land  grant  company 
having  congressmen  among  its  stockholders  and  directors,  is 
the  Leavenworth,  Lawrence,  &  Galveston  :  also,  the  Iowa  Falls 
&  Sioux  City;  also,  the  Cedar  Rapids  &  Missouri  River;  also, 
the  Burlington  &  Missouri  River ;  also,  the  Atlantic  &  Pacific ; 
also,  the  New  Orleans,  Mobile,  &  Texas ;  also,  the  Northern 
Pacific  ;  also,  Sioux  City  &  Pacific ;  also,  the  Fremont,  Elkhorn, 
&  Missouri  Valley.  The  number  might  be  extended,  but 
enough  is  given  to  sustain  our  charge.  Most  of  the  above 
named  companies  were  organized  under  state  laws,  or  received 
their  charters  from  state  or  territorial  legislatures-.  For  the 
purpose  of  consummating  certain  speculative  ends,  congress 
has  treated  with  contempt  state  laws  and  state  authority. 
Where  charters  have  been  granted  under  state  authority,  and 
the  companies  were  rightfully  under  the  control  of  the  states 
within  which  their  roads  were  located,  acts  like  the  following 
have  been  passed  by  congress :  "  That  the  Leavenworth, 
Pawnee,  &  Western  railroad  company,  of  Kansas,  are  hereby 
authorized  to  construct  a  railroad  and  telegraph  line  from  the 
Missouri  river,  at  the  mouth  of  the  Kansas  river,  on  the  south 
side  thereof  so  as  to  connect  with  the  Pacific  railroad  of  Mis 
souri  ;"  and  then  follow  the  details  for  constructing  and  oper 
ating  the  road,  and  placing  it  under  the  control  of  the  general 
government.  In  the  case  of  the  Central  Pacific  company, 
chartered  by  the  state  of  California,  congress  passed  the  fol 
lowing  act  :— 

"  The   Central   Pacific   railroad  company  of   California,  a 


96  MONOPOLIES  AND  THE  PEOPLE. 

corporation  existing  under  the  laws  of  the  state  of  California, 
are  hereby  authorized  to  construct  a  railroad  and  telegraph 
line  from  the  Pacific  coast,  at  or  near  San  Francisco,  or  the 
navigable  waters  of  the  Sacramento  river,  to  the  eastern  boun 
dary  of  California." 

Substantially  the  same  provision  is  found  for  most  of  the 
corporations  above  named,  and  in  all  these  cases,  the  authority 
to  construct  the  road  is  followed  by  a  provision  for  aid  by  the 
general  government. 

It  might  be  pertinent  to  inquire  why  it  became  necessary  for 
congress  to  assume  the  control  of  railroads  already  chartered 
under  state  authority.  It  cannot  be  claimed  that  the  states 
acted  without  authority  in  granting  the  charter  ;  nor  can  the 
authority  of  the  general  government  to  take  from  the  states 
the  control  of  railroads  within  their  border,  be  supported  by 
any  grant  of  power  contained  in  the  constitution.  On  the 
contrary,  the  power  is  reserved  to  the  states,  and  its  exercise 
is  denied  to  the  general  government.  It  cannot  be  urged  that 
the  interests  of  the  people  are  subserved  by  this  assumption 
of  power ;  on  the  contrary,  these  acts  of  congress  take  from 
the  public  its  rights  reserved  by  the  constitution.  But  one 
answer  can  be  given,  these  acts  were  passed  for  the  promotion  of 
selfish  and  corrupt  ends.  In  support  of  this,  we  need  only  state 
the  fact,  that  in  almost  every  instance  where  congress  has  at 
tempted  to  re-charter  companies  organized  under  state  author 
ity,  and  granted  them  aid,  members  of  congress  who  were 
members  at  the  date  of  the  passage  of  the  acts,  were  stock 
holders,  and  not  unfrequently  directors.  Some  congressmen 
who  have  been  members  for  the  last  ten  or  twelve  years,  are 
stockholders  in  several  of  the  companies,  and  at  least  one 
member  of  congress  of  twelve  years  standing  is  now  a  director 
in  at  least  three  companies  that  received  grants  of  land,  one  of 
them  getting  large  amounts  of  subsidy  bonds,  for  all  of  which 
he  voted,  and  for  which,  as  often  as  occasion  served,  he  has 
used  his  vote  and  influence  in  procuring  additional  privileges. 
We  do  not  claim  that  every  member  of  congress  is  interested 
in  railroads ;  but  we  do  assert  that  there  are  many  senators 
and  representatives  who  are  personally  interested,  and  that  the 
proportion  is  so  great  that  whenever  it  is  desirable  to  have 


STATE  RIGHTS  AT  THE  BAR  OF  A  CORRUPT  CONGRESS.  97 

legislation  it  can  be  obtained  without  difficulty.  To  prove 
that  the  chartering  and  endowing  of  railroad  companies  is  one 
of  the  principal  occupations  of  the  national  legislature,  we 
have  only  to  look  through  the  acts  of  congress  the  last  two  or 
three  sessions.  At  the  first  session  of  the  forty-second  con 
gress  fourteen  railroad  bills  were  passed,  some  of  them  con 
ferring  grants  to  companies  yet  in  embryo,  having  no  being 
save  upon  paper,  but  presenting  "  great  expectations  "  to  our 
congressmen,  who  combine  the  business  of  granting  charters 
and  building  railroads,  and  who  find  no  indelicacy  in  becom 
ing  stockholders  and  directors  in  the  corporations  to  which 
they,  as  congressmen,  have  voted  lands  and  money.  Some  of 
these  roads,  under  the  acts  of  congress,  present  great  induce 
ments  for  investments,  and  in  due  time  will  receive  proper 
attention.  The  effect  of  this  species  of  legislation  has  been 
most  baneful.  The  national  congress,  once  the  most  pure  and 
patriotic  body  in  the  world,  has  become  the  headquarters  of 
all  the  unscrupulous  men  of  the  nation.  It  is  under  the  con 
trol  of  dishonest  and  reckless  men.  Elections  to  seats  in  that 
body  have  become  of  such  value,  that  to  secure  them  men  do 
not  hesitate  to  pay  more  than  the  salary  for  the  entire  term. 
Nor  do  candidates  always  pay  their  own  money.  It  is  often 
furnished  by  rings  and  interests  which  require  special  legisla 
tion.  It  is  now  well  understood  that  senators  and  representa 
tives  are  in  the  market  like  other  commodities.  The  purchase 
is  made  either  in  large  donations  of  $10,000,  $20,000,  $30,000, 
or  more  from  single  corporations,  or  by  shares,  stock  or  bonds 
in  companies  chartered  by  congress,  and  afterwards  fostered 
and  protected  by  congressmen.  So  common  has  this  practice 
become  that  it  is  not  now  considered  disreputable.  What  in 
former  years  would  have  been  deemed  bribery  and  corruption 
are  now  nothing  but  fair  business  transactions.  We  recall  a 
case  which  illustrates  the  purity  of  former  legislation  com 
pared  with  what  we  see  in  our  own  day.  Some  thirty  years 
ago,  certain  parties  desired  a  charter  for  a  denominational 
college.  A  Rev.  Mr.  Strong  was  appointed  to  visit  the  capital 
and  interest  the  legislature  in  behalf  of  the  charter.  He  was 
introduced  to  a  Mr.  Gushing,  to  whom  he  presented  his  case, 
and  whom  he  sought  to  interest  in  favor  of  the  grant.  The 
12 


98  MONOPOLIES   AND    THE    PEOPLE. 

grant  of  the  charter  was  likely  to  meet  with  opposition,  and 
to  remove  certain  objections,  Mr.  Strong  was  anxious  to  have 
Mr.  Gushing  examine  into  the  matter  fully,  and  as  an  induce 
ment  for  making  such  an  examination  he  was  told  that  the 
friends  of  the  measure  would  compensate  him  liberally  for  the 
time  he  might  spend  in  such  examination.  This  Mr.  Gushing 
interpreted  as  an  offer  to  bribe  a  member  of  a  legislative  body, 
and  he  felt  bound  to  resist  it.  Accordingly  he  laid  the  matter 
before  the  house.  That  body  by  unanimous  vote,  ordered  the 
sergeant-at-arms  to  arrest  Mr.  Strong,  and  bring  him  to  the 
bar  of  the  house.  After  an  investigation  into  the  truth  of  the 
charge,  Mr.  S.  was  found  guilty  and  publicly  reprimanded  by 
the  speaker.  This  happened  before  legislators  had  learned  to 
speculate  upon  their  official  position.  It  was  in  simple  times, 
when  those  elected  to  office  supposed  their  first  duty  was  to 
serve  their  country,  and  when  it  was  an  irrecoverable  disgrace 
to  receive  a  bribe.  It  was  at  a  time  when  our  law-makers  had 
too  much  self-respect  to  purchase  their  election  with  tens  of 
thousands  of  dollars,  and  then  reimburse  themselves  by  taking 
stock  in,  and  dividends  from,  giant  corporations  chartered  and 
created  by  themselves.  How  is  it  now  ?  Let  the  facts  answer. 
Class  or  personal  legislation,  for  special  combinations,  or  in 
certain  interests,  is  the  rule,  and  legislation  for  the  benefit  of 
the  whole  people  is  the  exception  to  that  rule.  Congressmen, 
to  secure  an  election,  expend  large  sums  of  money,  and  when 
elected  their  first  care  is  to  get  even.  To  accomplish  their  pur 
pose,  they  resort  to  unconstitutional  legislation,  such  as  grant 
ing  exclusive  privileges  or  jobs  to  individuals,  for  which  indi 
rect  pecuniary  consideration  is  received.  But  this  alone  would 
not  suffice  to  reimburse  them  for  their  great  outlay.  The 
greatest  source  of  profit  to  congressmen  has  been,  and  unless 
it  is  checked,  will  continue  to  be,  found  in  railroad  legislation. 


CHAPTEE  X. 


AN    UNSETTLED   ACCOUNT  —  A    GUILTY   DIRECTORY. 

WE  now  invite  the  attention  of  the  reader  to  the  account 
as  it  now  stands  with  the  subsidy  bonds  voted  by  con 
gressmen  to  companies  in  which  many  who  voted  were 
stockholders  and  directors. 

As  the  law  stood  prior  to  April,  1871,  all  railroad  companies 
that  had  received  government  lands  were  required  to  pay  the 
interest  once  in  six  months  as  it  accrued.  This  interest  had 
not  been  paid,  and  the  secretary  of  the  treasury  withheld,  to 
apply  on  the  accrued  interest,  the  amount  earned  by  the  differ 
ent  companies  by  the  transportation  of  the  mails,  troops,  &c., 
for  government.  Congress,  composed  in  part  of  stockholders 
and  directors  in  these  same  companies,  passed  a  law  ordering 
the  secretary  to  pay  in  money  to  the  different  companies  one- 
half  of  the  amount  thus  earned,  and  left  it  optional  with  the 
companies  to  pay,  or  not  to  pay  the  interest  on  their  bonds. 
This  they  have  not  done,  and  the  interest  account  of  these 
companies  with  the  government  stands  about  as  follows  : — 

Central  Pacific,  paid $  527,025         Bal.  due $5,841,351 

Kansas  Pacific,     "    973,905  "       " 995,448 

Union  Pacific,      «    2,181,989          "       "    4,779,763 

Central  Branch,  U.P 15,839  "       "    477,969 

Western  Pacific,  "    9,350  "       "    358,329 

Sioux  City  &  Pacific  826  "       "    388,780 

Making  the  total  amount  of  payments  the  sum  of  $3,708,935, 
and  the  amount  that  these  companies  owe  government,  as  the 
accrued  interest  on  subsidy  bonds,  $12,861,640.  This  is  the 
amount  due  in  July,  1872.  Add  the  interest  accruing  since 
that  date  and  these  companies  owe  the  government  not  less 
than  $16,000,000  interest  on  their  bonds.  This  amount,  as 
well  as  future  interest,  and  the  principal  of  the  bonds  was  at 


100  MONOPOLIES    AND   THE    PEOPLE. 

one  time  secured  to  the  government ;  but  when  congressmen 
and  their  friends  get  a  controlling  interest  in  the  companies, 
they  procured  the  passage  of  an  act,  supported  by  their  own 
votes,  which  destroyed  the  security  held  by  the  government, 
and  relieved  the  companies  of  the  payment  of  this  large  amount 
of  interest,  thereby  compelling  the  people  to  pay  it,  while  the 
stockholders,  including  some  of  the  same  congressmen  who 
had  voted  in  favor  of  the  act,  received  dividends  on  their  stock 
and  on  their  Credit  Mobilier  stock  to  the  amount  of  two  and 
three  hundred  per  cent ;  thus,  by  the  abuse  of  the  power 
vested  in  themselves  as  members  of  congress,  compelling  the 
people  to  pay  the  interest  the  companies  should  have  paid,  and 
pocketing  in  the  shape  of  dividends  the  money  so  dishonestly 
obtained.  If  we  needed  any  further  proof  to  establish  the  fact 
that  these  Pacific  railroads  were  in  fact  congressional  jobs,  that 
members  of  congress  were  looking  to  their  own  interests 
rather  than  to  the  interests  of  the  people,  we  need  but  glance 
at  the  interest  account  of  the  Sioux  City  &  Pacific  company. 
The  excuse  pleaded  of  the  "  necessities  of  government,"  will 
not  avail  in  this  instance.  While  the  interest  account  of  this 
company  is  about  $400,000,  the  account  for  the  transportation 
of  troops,  mails,  &c.,  over  its  road,  amounts  to  the  sum  of 
$1,642,  one-half  of  which  has  been  applied  on  the  interest  ac 
count  of  the  company,  and  the  other  half,  under  the  act  of 
congress,  has  been  paid  by  the  secretary  of  the  treasury  to  the 
company.  The  conclusion  is  irresistible,  that  the  personal  in 
terest  of  congressmen,  rather  than  the  wants  of  the  public,  has 
controlled  their  action. 

Connect  with  the  incorporation  of  railroad  companies,  and 
special  legislation  in  their  favor,  the  legislation  in  favor  of  "In 
dian  rings,"  "  whisky  rings,"  "  patent  right  combinations,"  and 
the  numerous  other  kinds  of  special  legislation,  with  the  advan 
tages  presented  to  legislators  to  make  personal  gain  from  all 
these  sources,  and  we  can  well  understand  why  men  are  willing 
to  spend  such  large  sums  to  secure  an  election  to  the  United 
States  senate,  or  house  of  representatives.  The  baneful  effects 
of  the  modern  code  of  political  morality  are  not  seen  in  the  legis 
lative  department  of  the  government  only.  The  same  disregard 
of  the  rights  of  the  people,  and  a  determination  to  protect  and 


AN    UNSETTLED    ACCOUNT  —  A    GUILTY   DIRECTORY.  101 

aid  combinations  in  their  efforts  toward  self-aggrandizement, 
made  at  a  sacrifice  of  those  principles  which  are  supposed  to 
govern  all  persons  holding  places  of  trust,  honor,  or  confidence, 
seem  to  influence  to  a  great  degree  those  holding  high  position 
in  other  departments  of  the  government.  The  acts  of  congress 
chartering  the  Pacific  railroad  companies  make  it  the  duty  of 
the  president  of  the  United  States  to  appoint  five  government 
directors  for  these  roads.  Under  the  statutes  these  directors 
cannot  own  stock  in  the  companies,  nor  have  in  them  any  per 
sonal  interest  whatever.  They  are  supposed  to  be  free  from 
any  bias  for  or  against  the  companies ;  but  they  are  appointed 
to  represent  the  government,  and  to  guard  against  and  report 
to  the  secretary  of  the  interior  all  abuses  on  the  part  of  the 
companies,  and  at  such  times  as  they  are  required  to  so  report, 
to  also  make  such  suggestions  as  in  their  opinion  shall  best 
subserve  the  interests  of  the  public.  It  is  made  their  duty  to 
personally  inspect  the  roads,  during  their  building  and  after 
their  completion.  At  least  two  of  these  government  directors 
must  have  a  place  on  all  important  committees  appointed  by 
the  companies  for  the  management  and  prosecution  of  their 
business.  Any  dishonesty  on  the  part  of  the  companies  in 
letting  contracts  for  the  construction  of  their  roads,  or  any 
misapplication  of  the  grants  made  by  congress,  must  have  been 
known  to  these  five  government  directors,  or  some  of  them,  if 
they  had  properly  discharged  the  duties  imposed  upon  them  by 
law.  The  formation  of  an  inside  ring,  under  the  title  of  "  The 
Credit  Mobilier  of  America,"  composed  entirely  of  the  direct 
ors  and  stockholders  of  the  Union  Pacific  company,  the  letting 
of  the  contract  for  the  construction  of  the  road  to  one  of  the 
directors  of  the  railroad  company,  who  was  also  a  director  in 
the  Credit  Mobilier  (and  a  member  of  congress),  at  more  than 
double  its  actual  cost,  the  transfer  of  this  contract  to  certain 
trustees  who  were  directors  in  both  companies,  in  the  manner 
stated  in  a  preceding  chapter  of  this  work,  and  the  declaration 
of  large  dividends  on  the  stock  of  the  companies  at  a  time 
when  the  work  on  the  road  was  barely  begun,  and  before 
any  dividends  could  possibly  have  been  earned, — all  these 
facts  must  have  been  known  to  the  government  directors,  and 
concealed  by  them  from  the  government.  When  it  is  remem- 


102  MONOPOLIES   AND   THE    PEOPLE. 

bered  that  some  of  these  government  directors  were  members 
of  congress  at  the  date  of  the  passage  of  the  acts  chartering 
the  roads,  there  is  but  little  question  that  the  same  influences 
controlling  them  in  voting  these  large  subsidies  to  the  compa 
nies  also  controlled  them  as  government  directors  in  their 
supervision  of  the  roads.  This  conclusion  is  strengthened  on 
seeing  that  some  of  them  became  owners  of  stock  in  the  Credit 
Mobilier. 

The  same  corrupting  influences  have  been  felt  in  other  de 
partments  of  the  government.  The  abuses  practiced  in  the 
collection  of  customs  by  the  officers  at  the  different  ports  of 
entry,  as  shown  at  the  recent  investigations  made  by  authority 
of  congress,  are  but  the  natural  sequence  of  the  questionable 
course  of  the  legislative  department.  The  great  frauds  prac 
ticed  by  parties  having  contracts  for  furnishing  supplies  to  the 
Indian  tribes  are  traceable  to  the  same  source.  This  assump 
tion  by  congress  of  the  power  to  grant  charters  to  private 
monopolies,  its  unconstitutional  interference  in  matters  re 
served  to  state  control,  its  determination  to  foster  these  gigan 
tic  corporations  by  princely  grants,  with  the  corruption  inci 
dent  to  these  selfish  and  greedy  combinations,  are  the  direct 
cause  of  the  dishonesty  prevailing  everywhere  among  our  pub 
lic  officers,  and  besides  other  rank  growth  have  led  to  the  im 
position  of  burdens  upon  the  people,  oppressive  to  the  last 
degree.  The  controlling  purpose  of  a  large  portion  of  those 
elected  or  appointed  to  government  offices  seems  to  be  to  accu 
mulate  wealth  without  regard  to  the  propriety  or  honesty  of 
the  means  employed.  In  their  eagerness  to  benefit  themselves, 
all  consideration  for  the  public  good,  or  respect  for  their  obli 
gations  as  sworn  servants  of  the  people,  are  of  secondary  im 
portance.  They  accept  office  from  purely  selfish  motives,  and 
enter  upon  their  duties  with  the  same  object  in  view  animat 
ing  those  who  embark  in  trade,  manufactures,  or  commerce^ 
viz  :  private  gain.  Seemingly  viewing  the  offices  they  hold  as 
being  their  own  private  property,  they  use  them  as  the  banker 
uses  his  money — for  purposes  of  speculation.  Not  un fre 
quently  they  permit  themselves  to  be  bought  and  sold,  like 
any  other  articles  of  merchandise.  While  we  do  not  claim 
that  all  public  officers  were  pure  prior  to  the  legislative  creation 


AN    UNSETTLED    ACCOUNT  —  A    GUILTY   DIRECTORY.  103 

of  the  monopolies  we  have  been  examining,  we  do  claim  that 
previous  to  that  sad  departure,  honesty  was  the  rule,  and  not 
the  exception.  It  was  when  congress  entered  upon  the  busi 
ness  of  chartering  railroad  companies,  donating  public  lauds  to 
them,  and  voting  them  money  from  the  public  treasury,  that 
the  rule  changed  ;  and  when,  in  addition,  congressmen  became 
principal  owners  and  directors  in  these  companies,  while  still 
retaining  their  seats  in  congress,  they  placed  themselves  upon 
the  record  as  unfaithful  to  their  trust,  and  struck  a  blow  at 
public  morality  which  will  be  fatal  to  our  popular  government, 
unless  resisted  by  the  whole  moral  power  of  the  nation. 

And  here  we  might  well  pause,  and  ask,  what  security  have 
the  people  for  the  continuance  of  republican  government? 
These  gigantic  corporations  are  in  their  nature  anti-republican; 
they  tend  to  a  centralization  of  power;  they  compel  the  peo 
ple  to  submit  to  their  demands;  they  are  under  the  protection 
of  congress,  under  whose  special  legislation  they  are  permit 
ted  to  disregard  state  laws;  their  ramifications  extend  through 
out  the  country;  their  artifices  and  money  control  the  votes  of 
the  people;  they  elect  their  friends  to  both  the  senate  and 
house;  they  organize  and  send  strong  bodies  of  men  to  the 
lobby  of  congress  and  state  legislatures,  well  supplied  with 
money  to  obtain  the  passage  of  laws  in  their  interest,  and  to 
prevent  such  legislation  as  would  be  detrimental  to  them,  and 
in  favor  of  the  people;  they  have  their  friends  and  emissaries 
in  every  department  of  the  government,  and  throughout  the  coun 
try,  and  they  exercise  a  controlling  influence  not  only  at  Wash 
ington,  but  at  almost  all  the  seats  of  state  government.  The 
offices  filled  by  appointment  of  the  executive  and  confirmation 
of  the  senate,  are  too  often  the  agencies  of  this  same  influence. 
We  would  not  be  understood  as  saying  that  the  president  acts 
corruptly  in  these  appointments;  we  mean  that  the  influences 
that  secure  many  of  the  presidential  nominations  are  the  same 
as  used  by  these  corporations  in  the  election  of  their  senators 
and  representatives.  The  appointment  of  judges  of  the  su 
preme  court  of  the  United  States  has,  in  at  least  two  instan 
ces,  within  the  last  few  years,  been  made  through  the  influence 
and  in  the  interest  of  these  monopolies.  These  corporations  are 


104  MONOPOLIES    AND    THE    PEOPLE. 

also  represented  in  the  cabinet.  It  is  well  understood  that  the 
removal  of  Attorney  General  Ackerrnan,  and  the  appointment 
of  his  successor,  was  done  by  these  corporate  influences.  The 
fact  that  the  secretary  of  the  interior,  to  whom  reports  should 
have  been  regularly  made  of  the  progress  and  condition  of  the 
Pacific  railroad,  was  silent,  while  private  fortunes  were  being 
fraudulently  taken  from  the  public  treasury,  proves  that  he  al 
so  was  under  the  same  influence.  It  can  be  accepted  as  an 
established  fact,  that  all  the  departments  of  the  government 
are  to  a  great  extent  controlled  by  corporations  and  combina 
tions  of  speculators  whose  interests  are  adverse  to  those  of  the 
people,  and  the  result  is,  that  statutes  are  enacted,  executive 
offices  appointed,  and  decisions  of  court  rendered  in  the  favor 
of  these  powerful  classes,  while  the  rights  guaranteed  to  the 
people  by  the  constitution  are  disregarded. 

The  influence  of  corporations  is  also  powerful  in  the  admin 
istration  of  state  governments.  While  no  such  gigantic  mo 
nopolies  as  the  Pacific  railroad  have  been  organized  in  any 
state  yet,  either  by  special  charters  granted  by  state  legisla 
tures,  or  under  general  incorporation  laws,  railroad  corpora 
tions  in  large  numbers  have  been  organized,  and  by  combin 
ing  their  influence,  have  obtained  control  of  most  of  the  state 
governments;  they  have  been  granted  special  and  exclusive 
privileges,  and  by  the  use  of  money  and  patronage  have  been 
able  to  control  state  conventions,  state  legislatures,  and  state 
courts.  As  a  logical  result,  the  people  are  taxed,  while  rail 
road  companies  are  practically  free  from  taxation;  subsidies 
to  corporations  are  authorized  and  declared  to  be  constitution 
al,  and  the  people  are  obliged  to  submit  to  rates  of  charges  for 
transportation  of  freight  that  amount  to  a  confiscation  of  the 
farm  products  of  the  country.  We  need  not  enter  into  a  his 
tory  of  state  grants  to  railroad  companies,  for  it  is  familiar  to 
all;  the  same  corrupt  practices  incident  to  national,  attend 
state,  legislation.  In  many  instances,  corporations  have  or 
ganized  under  state  statutes,  or  obtained  special  charters  from 
state  legislatures,  located  their  roads,  procured  local  aid,  and 
then  obtained  from  congress  land  grants  for  their  roads,  and 
have  thus  become  powerful  in  the  states  where  they  are  loca- 


AN    UNSETTLED    ACCOUNT*— A    GUILTY    DIRECTORY.  105 

ted,  while  other  companies  have  built  their  roads  exclusively 
with  the  means  afforded  by  local  aid  voted  under  state  laws, 
and  loans  of  money  or  sale  of  bonds;  but  in  every  instance  so 
planning  and  contriving  that  the  entire  road  shall  pass  into 
the  exclusive  control  of  a  select  few,  leaving  to  those  who  fur 
nished  the  local  aid  no  rights  or  privileges  in  connection  with 
the  company,  or  the  road,  save  that  of  paying  extortionate 
freights  and  burdensome  taxes. 


18 


CHAPTER  XL 


THE  SOLE  PURPOSES  OF  TAXATION. 

r~F>AXES  can  only  be  levied,  and  collected,  for  public  pur 
poses  ;  but  all  the  property  of  the  country  can  be  taxed 
-A-  to  its  entire  value,  when  the  public  good  requires  it.  The 
exigency  demanding  high  rates  of  taxation  is  left  to  the  deter 
mination  of  the  legislatures  of  the  states,  and  of  the  general 
government.  No  taxes  can  be  legally  levied  or  collected  save 
for  the  support  of  the  government,  state  and  national,  and  sub 
ject  to  the  restrictions  incorporated  in  the  constitution.  All 
other  taxes  imposed  upon  the  people  are  unconstitutional,  ille 
gal,  and  oppressive,  and  should  be  declared  absolutely  void. 
Direct  taxation,  for  the  support  of  the  general  government,  has 
never  been  practiced  in  time  of  peace.  The  usual  method  for 
raising  a  sufficient  revenue  for  its  support  has  been  by  duties, 
or  tariff  imposed  by  acts  of  congress  upon  imports.  This  has 
always  been  deemed  the  best  method  for  raising  the  revenue 
necessary  for  the  support  of  the  government.  The  powers  and 
duties  of  the  general  government  are  limited  and  restricted  by 
the  constitution  of  the  United  States;  and  as  its  legislative, 
executive,  and  judicial  powers  are  thus  limited,  it  follows  that 
its  power  to  impose  taxes  upon  the  people  is  limited  in  the 
same  manner,  rnd  that  it  can  tax  for  no  purpose  save  for  de 
fraying  the  expenses  of  its  different  departments  in  the  exer 
cise  of  the  powers  delegated  by  the  federal  constitution.  This 
conceded,  all  that  can  be  claimed  by  those  who  administer  the 
affairs  of  the  nation,  unless  they  transcend  the  constitutional 
limit,  is  conceded.  The  power  to  appropriate  the  lands  or 
money  of  the  public  to  private  parties  or  corporations  not  be 
ing  found  in  the  constitution,  nor  implied  in  any  of  the  granted 
powers,  all  such  appropriations  are  usurpations;  they  are  do 
nations  of  the  people's  money  and  property  to  private  corpo- 


THE    SOLE    PURPOSES    OF   TAXATION.  107 

rations  and  individuals  in  violation  of  the  constitutional  restric 
tions  ;  and  no  authority  is  vested  in  congress  to  tax  the  people, 
either  directly  or  indirectly,  for  the  purpose  of  making  return 
of  the  money  and  property  thus  wrongfully, taken  from  them. 
A  private  corporation  is  not  a  public  necessity ;  its  franchises 
are  private  property,  and  even  if  the  United  States  owned  the 
whole  of  its  stock,  and  took  the  entire  control  of  its  business, 
it  could  not  become  a  public  corporation,  for  the  reason  that 
congress  does  not  possess  the  power,  under  the  constitution,  to 
create  private  corporations.  The  fact  that  the  United  States 
owned  the  stock  and  controlled  the  corporation  would  not  im 
part  to  it  any  of  the  attributes  of  sovereignty,  but  in  so  far  as 
the  general  government  was  interested  in  the  corporation,  it 
would  be  treated  as  any  other  private  party,  and  would  be 
amenable  to  the  same  law  and  subject  to  the  same  jurisdiction 
as  private  parties  or  individuals.  If  the  action  of  the  general 
government  can  confer  none  of  the  attributes  of  sovereignty 
upon  a  private  corporation  —  if  it  has  no  constitutional  author 
ity  to  donate  lands  or  money  to  railroad  companies  —  how  can 
it  lawfully  collect  taxes  from  the  people,  either  by  direct  levies, 
or  in  duties  upon  articles  of  commerce,  for  the  purpose  of  re 
imbursing  the  government  for  the  lands  donated  to  corpora 
tions,  or  to  pay  either  the  principal  or  interest  on  the  bonds 
given  to  these  corporations  ?  As  well  might  congress  levy  a 
direct  tax  upon  the  property  of  the  people  for  the  purpose  of 
donating  to  a  private  party  sufficient  means  to  build  a  resi 
dence  ;  there  is  not  found  in  the  constitution  any  warrant  for 
either  of  such  levies.  Both  alike  are  unwarranted  usurpations 
of  power,  not  to  be  justified  under  any  grant  of  power  from 
the  people  to  the  federal  government.  To  admit  that  the  con 
gress  of  the  United  States  possesses  the  power  to  tax  the  peo 
ple  for  any  purpose  save  for  the  support  of  the  general  gov 
ernment,  is  to  admit  that  the  constitution  is  elastic,  subject  to 
any  congressional  construction,  and  liable  to  be  used  as  an  in 
strument  for  promoting  personal  and  private  ends.  Congress 
had  no  power  to  vote  subsidy  bonds  to  railroad  corporations, 
as  we  have  already  shown ;  nor  could  it  release  these  corpora 
tions  from  the  payment  of  these  bonds,  and  the  interest  as  it 
accrues,  and  collect  the  amount  from  the  people  in  duties  on 


108  MONOPOLIES    AND    THE    PEOPLE. 

imports,  or  in  any  other  kind  of  taxes.     No  such  power  was 
ever  delegated  to  the  general  government  by  the  people.    This 
power  cannot  be  found  in  any  part  of  the  constitution.     While 
this  is  true,  the  people  are  now  taxed  annually  to  the  amount 
of  nu:ny  millions  of  dollars  to  pay  the  interest  on  the  bonds 
issued  to  the  Pacific  railroads.     Taxes  are  also  collected  to  the 
amount  of  $18,000,000  or  $20,000,000  to  pay  the  interest  on 
the  banking  capital  of  the  country,  the  stock  of  a  gigantic  cor 
poration,  chartered  by  congress,  but  in  the  hands  and  under 
the  control  of  private  parties  and  companies.     While  the  gen 
eral  government,  under  the  constitution,  has  the  control  of  the 
money  of  the  country,  and  its  coinage,  value,  etc.,  and  can  pro 
vide  such  means  as  shall  be  deemed  best  for  the  administration 
of  the  national  or  public  finances,  it  has  no  power  to  enter  into 
private  banking ;  and  because  it  has  not  this  power,  it  cannot 
create  private  banking  institutions  and  tax  the  people  for  their 
support.     Any  tax  levied  upon  the  citizen  by  the  general  gov 
ernment  for  any  purpose  whatsoever,  save  for  the  necessary 
expenses  in  the  administration  of  the  same,  in  all  of  its  depart 
ments,  in  accordance  with  the  letter  and  spirit  of  the  constitu 
tion,  is  without  authority,  and  violates  the  fundamental  law. 
The  levy  of  taxes  in  aid  of  private  corporations  subserves  none 
of  the  purposes  of  the  government,  and  is  the  exercise  of  a  power 
not  possessed  by  congress.     Our  position  is  fully  sustained  by 
legal  adjudications,  and  by  the  writings  of  eminent  jurists. 
Chief  Justice  Marshall,  in  his  writings  upon  the  constitution, 
has  considered  this  point.     He  says,  on  page  345  of  his  work: 
"  It  is,  we  think,  a  sound  principle,  that  when  a  government 
becomes  a  partner  in  a  trading  company,  it  divests  itself,  so  far 
as  concerns  the  transactions  of  the  company,  of  its  sovereign 
character,  and  takes  that  of  a  private  citizen.     Instead  of  com. 
municating  to  the  company  its  privileges  and  its  prerogatives, 
it  descends  to  a  level  with  those  with  whom  it  associates  itself, 
and  takes  the  character  which  belongs  to  its  associates,  and  to 
the  business  which  it  transacts.     *     *     *     As  a  member  of  a 
corporation,  a  government  never  exercises  its  sovereignty.     It 
acts  merely  as  a  corporator,  and  exercises  no  other  powers  in 
the  management  of  the  affairs  of  the  corporation  than  are  ex 
pressly  given  by  the  incorporation  act.     The  government  of 


THE  SOLE  PURPOSES  OP  TAXATION.  109 

the  Union  held  shares  in  the  old  Bank  of  the  United  States ; 
but  the  privileges  of  the  government  were  not  imparted  by  that 
circumstance  to  the  bank." 

If  there  exists  any  authority  in  the  general  government  to 
create  a  corporation  for  any  purpose,  it  is  in  relation  to  the 
finances  of  the  country.  The  necessity  of  a  fiscal  agent  of  some 
kind  would  seem  to  warrant  the  creation  of  a  banking  corpo 
ration.  But,  if  the  power  is  conceded,  it  does  not  follow  that 
the  people  should  be  taxed  to  provide  a  bounty,  payable  semi- 
annually,  to  the  private  companies  who  are  engaged  in  bank 
ing,  and  who  alone  receive  the  profits  arising  from  the  business. 
Yet  the  act  of  congress  creating  the  banks  provides  for  the 
payment  of  semi-annual  interest  on  the  capital  invested;  and 
this  interest  is  collected  from  the  people.  All  railroad  corpo 
rations,  created  by  act  of  congress,  are  absolutely  private  cor 
porations.  The  insertion  in  the  charter  of  the  words — "to 
secure  the  more  safe  and  speedy  transportation  of  the  mails, 
troops,  munitions  of  war,  and  government  supplies" — found 
in  all  of  these  charters,  does  not  change  the  character  of  the 
corporations.  The  grants  are  made  to  private  parties;  the 
roads  are  under  their  control ;  they  receive  aid  from  the  gen 
eral  government,  but  in  their  own  names  own  and  control  the 
roads,  and  can,  at  any  time,  dispose  of  the  roads  and  franchises, 
and  the  general  government  has  no  power  to  prevent  any  ac 
tion  the  companies  may  choose  to  adopt  so  long  as  they  regard 
the  provisions  of  their  charters.  No  statesman  or  jurist  of  our 
country  has  at  anytime,  until  within  the  last  few  years,  claimed 
that  congress  could  create  corporations  for  private  purposes ; 
on  the  contrary,  in  all  of  the  earlier  decisions  of  the  federal 
courts,  it  was  uniformly  conceded  that  congress  did  not  possess 
the  power  to  create  such  corporations.  Chancellor  Kent,  Chief 
Justice  Marshall,  and  other  eminent  writers,  are  all  agreed 
that,  under  the  constitution,  congress  cannot  create  a  private 
corporation.  If  congress  had  no  constitutional  right  to  create 
railroad  corporations,  how  can  it  possess  the  power  to  tax  the 
people  to  pay  their  debts  ?  The  people  are  now  paying  at  least 
$8,000,000  per  annum  in  shape  of  taxes  for  the  purpose  of 
liquidating  the  interest  due  from  railroads  chartered  by  con 
gress  in  violation  of  the  fundamental  law  of  the  land.  This 


110  MONOPOLIES    AND   THE    PEOPLE. 

large  amount  of  taxes  is  collected  and  applied  by  the  general 
government  in  payment  of  interest  due  from  railroad  compan 
ies,  because  the  influence  of  congressmen  and  their  friends, 
in  these  companies,  was  sufficiently  powerful  to  override  con 
stitutional  barriers,  and  to  procure  the  passage  of  an  act  en 
abling  the  parties  holding  the  stock  to  pocket  the  earnings  of 
their  roads  and  make  good  the  deficit  in  their  interest  account 
by  taxing  the  people. 

The  whole  history  of  congressional  legislation  does  not  pre 
sent  a  case  of  such  entire  disregard  of  the  provisions  of  the 
constitution,  and  such  dishonest  and  corrupt  legislation  as  is 
contained  in  the  acts  of  congress  relating  to  the  Pacific  rail 
roads.  It  is  questionable  whether  another  instance  can  be 
found  in  this  or  any  other  country,  having  a  constitutional  gov 
ernment,  where  legislators,  by  direct  vote,  have  taken  millions 
of  money  from  the  public  treasury  and  given  it  to  private  cor 
porations  of  which  they  were  members  and  directors,  and  to 
make  good  the  amount  thus  taken  from  the  treasury  have  pro 
vided  by  law  for  its  collection  from  the  people  in  the  shape  of 
taxes  and  duties  !  When  we  remember  that  congress  does  not 
possess  the  power  to  charter  private  corporations ;  that  in  so 
doing  it  violates  the  letter  and  spirit  of  the  constitution;  upon 
what  principle  can  it  claim  the  right  to  tax  the  people  for  the 
benefit  of  these  private  corporations  ?  We  repeat,  no  country 
in  the  world,  governed  by  a  written  constitution,  offers  a  par 
allel  case.  Not  even  in  France,  under  the  personal  government 
of  the  late  emperor,  would  such  an  unwarranted  act  have  been 
attempted. 

We  are  aware  that  it  is  claimed  that  railroad  corporations 
are  public  corporations  —  and  this  granted,  taxes  may  be  right 
fully  levied  and  collected  for  their  benefit.  But  we  do  not  grant 
this,  and  shall,  in  the  following  pages,  essay  to  demonstrate 
that  all  railroad  corporations  are  private,  being  owned  and  con 
trolled  by  private  citizens,  and  not  by  the  state  or  national 
government.  But  admitting  they  are  public  and  not  private 
corporations,  the  general  government  even  then  cannot  legally 
charter  or  control  them,  because  the  power  for  that  purpose 
has  never  been  delegated  by  the  states  or  the  people;  and  it 
follows  that  the  general  government  cannot  rightfully  impose 


THE    SOLE    PURPOSES    OF   TAXATION.  Ill 

taxes  upon  the  people  for  the  support  of  coporations  over  which 
it  can  have  no  control.  If  congress  can  levy  taxes  for  the  con 
struction  and  support  of  railroads,  and.  take  the  management 
and  control  of  them,  it  certainly  can  take  the  entire  supervi 
sion  of  all  the  highways  in  all  the  states,  provide  for  their  con 
struction,  and  tax  the  people  at  will  for  that  purpose.  This 
being  admitted,  no  local  or  police  regulation  in  any  of  the 
states  is  exclusively  under  the  jurisdiction  of  the  state  govern 
ments  ;  but  the  general  government  may  at  any  time  take  the 
absolute  control  of  the  governmental  affairs  of  the  several 
states,  and  thus  complete  the  centralization  of  power  now  so 
rapidly  developing  in  all  the  departments  at  Washington.  The 
assumption  of  the  right  to  tax  the  people  for  any  and  every 
purpose  that  to  congress  shall  seem  expedient,  irrespective  of 
constitutional  prohibition,  is  at  once  destructive  of  the  rights 
that  were  supposed  to  be  guaranteed  and  preserved  to  the  whole 
people  by  the  constitution.  If  the  will  of  those  men  who  hap 
pen  to  occupy  seats  in  congress  (and  that  will  too  often  con 
trolled  by  personal  interest)  is  to  govern,  then  all  constitutional 
government  is  at  an  end,  and  the  liberty  and  property  of  the 
citizen  have  no  constitutional  safeguard.  Taxes  to  the  entire 
value  of  all  the  wealth  in  the  country  may  be  levied  by  the 
general  government,  and  the  citizen  of  this  republic  holds  his 
entire  estate  at  the  will  of  the  persons  who  fill  the  offices  of 
the  country.  Under  the  system  of  congressional  legislation 
that  now  obtains,  the  laboring  and  producing  classes  are  being 
rapidly  reduced  to  a  state  of  servitude  that  would  grace  the 
most  despotic  government. 


i 

CHAPTER    XII.  tf 

\ 


THE    RIGHT   OF    EMINENT   DOMAIN. —  UNCONSTITUTIONALLY  OF    MU 
NICIPAL   AID  TO  RAILROADS. 


THE  question  of  taxation  for  the  benefit  of  private  corpo 
rations  has  agitated  the  public  mind  since  the  construc 
tion  of  railroads  became  one  of  the  admitted  necessities 
of  the  country.  For  the  purpose  of  justifying  and  legalizing 
governmental  aid  to  railroad  corporations,  in  the  various  forms 
in  which  such  aid  has  been  afforded,  the  doctrine  has  obtained 
among  the  advocates  of  the  measure  that  railroads  are  public 
highways,  as  well  as  a  public  necessity;  and  such  being  the 
fact,  that  aid  in  the  shape  of  grants,  taxes,  and  subsidies,  are 
legal,  legitimate,  and  proper.  They  draw  an  argument  in  fa 
vor  of  this  doctrine,  from  the  fact  that  legislatures,  state  and 
national,  have  provided  by  law  for  the  condemnation  of  private 
property,  for  the  use  of  the  companies,  respectively,  upon  paying 
the  assessed  value  thereof;  and  that  thus  the  right  of  eminent 
domain  is  vested  in  these  corporations  ;  that  the  right  of  emi 
nent  domain  is  an  attribute  of  sovereignty,  and  that  the  grant 
ing  of  this  attribute  to  corporations  imparts  to  them  the  char 
acter  of  public  highways.  They  reason  that  because  they  are 
public  highways,  and  the  companies  owning  them  are  common 
carriers,  taxes  may  be  legally  levied  and  collected  for  the  ex 
clusive  use  of  these  companies.  They  claim  that  because  the 
United  States,  states,  counties,  cities,  towns,  and  townships, 
have  authority  to  construct,  or  to  aid  in  constructing,  common 
highways,  they  have  the  same  right  to  construct,  or  aid  in 
constructing,  railroads. 

If  it  were  not  that  precedent  has  tended  to  sustain  this 
"  false  doctrine,"  we  would  not  think  it  profitable  to  combat 
it.  The  only  point  in  the  argument  in  favor  of  this  doctrine 


AID   TO    RAILROADS    UNCONSTITUTIONAL.  113 

that  has  any  real  foundation,  is,  that  railroad  companies  are  al 
lowed  to  locate  their  roads  where  they  please,  upon  payment 
of  the  damages  assessed  in  the  manner  prescribed  by  statute. 
The  answer  to  this  is,  that  railroads  could  not  be  built,  unless 
the  companies  had  permission  to  pass  over  the  lands  of  private 
citizens.  If  the  title  from  each  land  owner  could  be  procured 
only  by  negotiation  and  purchase,  no  railroad  could  be  con 
structed,  for  the  reason  that  a  direct  or  continuous  line  for  a 
road  could  rarely  be  secured.  Railroads  are  constructed  to 
aid  in  the  transportation  of  freight  and  passengers  from  one 
part  of  the  country  to  another;  to  promote  commerce 
throughout  the  whole  country ;  to  supply  the  wants  of  a  peo 
ple,  just  as  a  mill  or  factory  supplies  the  wants  of  a  particular 
locality.  The  miller  constructs  his  dam  across  a  stream,  and, 
under  the  statutes  of  most  of  the  states,  he  can  procure  the 
condemnation  of  the  land  of  his  neighbor  overflowed  by  hb 
dam,  to  his  own  use,  upon  payment  of  the  damages  assessed. 
It  is  not  a  condemnation  for  the  use  of  the  public,  but  for  the 
use  and  benefit  of  the  owner  of  the  mill.  The  mill  itself, 
while  it  is  owned  by  a  private  individual,  and  can  be  sold  and 
transferred  by  him  at  any  time,  is  also  a  public  benefit.  Can 
it  be  said  that  the  right  of  eminent  domain  attaches  to  the  mill 
or  its  owner?  So  with  railroads:  They  are  owned  by  private 
companies  —  are  built  and  controlled  by  them ;  they  are  of 
public  benefit,  but  not  owned  or  controlled  by  the  public  or  by 
the  state,  or  local  authority,  as  in  the  case  of  public  highways. 
Their  private  owners  can  sell  them,  with  all  their  franchises, 
rights,  and  privileges.  The  rules  for  their  operation,  rates  of 
charges,  and  all  other  matters  affecting  their  government,  are 
exclusively  under  the  control  of  the  parties  owning  them. 
Only  that  the  companies  may  become  the  owners  of  the  neces 
sary  grounds  over  which  to  build  their  roads,  have  legislatures 
provided  that  they  may  enter  upon  lands  owned  by  private 
persons,  and  upon  the  payment  of  the  appraised  value  thereof, 
appropriate  a  narrow  strip  (the  width  being  fixed  by  statute) 
for  the  purpose  of  locating  their  road  upon  it.  It  is  not  con 
demned  for  public  use,  as  in  the  case  of  a  public  highway,  or 
where  land  is  needed  for  public  buildings,  or  any  other  public 
purpose.  The  assessed  value  is  not  paid  by  the  government, 
14 


114  MONOPOLIES    AND   THE    PEOPLE. 

or  from  the  public  fund,  nor  by  individuals  for  the  public ; 
but  by  the  private  corporation  out  of  its  own  purse,  and  for  its 
own  gain. 

This  is  what  is  called,  by  the  advocates  of  the  measure, 
"  the  right  of  eminent  domain,"  a  right  that  only  belongs  to 
the  supreme  government.  This  power  cannot  be  exercised  by 
local  or  subordinate  governments,  unless  it  is  delegated  to 
them  by  the  supreme  or  superior  government.  While  the 
courts  in  some  of  the  states,  Iowa  included,  have,  by  decisions, 
made  this  right  of  eminent  domain  attach  to  railroad  compa 
nies,  it  cannot  be  supported  on  principle.  To  allow  it  to  ob 
tain  is  to  clothe  private  corporations  with  the  attributes  of 
sovereignty.  But  conceding  that  this  right  attaches  to  these 
corporations,  upon  no  principle  of  constitutional  law  or  justice 
can  the  right  to  levy  taxes  upon  private  citizens  to  aid  in  the 
construction  of  railroads,  either  by  acts  of  congress,  by  state 
statutes,  or  by  local  municipal  government,  be  supported. 
And  it  matters  not  in  what  form  these  taxes  are  imposed  upon 
the  people,  whether  in  the  shape  of  municipal  subscriptions  of 
stock,  to  be  paid  by  assessments  upon  the  people  ;  by  dona 
tions  of  land  or  money,  to  be  repaid  by  imposing  a  larger  price 
upon  lands  sold  to  the  citizen ;  by  indirect  taxation,  or  by 
special  local  elections  held  in  cities,  towns,  or  counties, — the 
compulsory  taxation  of  the  property  of  individuals,  under  our 
system  of  government,  can  only  be  imposed  for  governmental 
or  public  purposes.  Taxes  are  levied  for  the  support  of  the 
government  in  all  its  departments;  for  the  construction  and 
repairing  of  highways ;  for  the  building  of  school  houses  and 
all  other  edifices  of  a  public  character;  for  the  support  of 
schools ;  for  the  necessities  of  local  municipal  governments, 
and  for  other  objects  having  the  public  weal  for  their  sole  con 
sideration.  These  taxes  are  legitimate  and  proper,  because 
the  ends  sought  to  be  reached  by  such  taxation  are  for  the  use 
and  benefit  of  the  whole  people,  arid  for  the  protection  of  their 
rights.  For  all  of  these  purposes  the  legislature  can  provide 
an  uniform  system  of  taxation.  But  when  the  government 
attempts  to  compel  A  to  pay  a  tax  to  assist  B  and  C  in  build 
ing  a  railroad,  it  enters  upon  the  exercise  of  a  despotic  and 
oppressive  power,  that  is  in  conflict  with  the  letter  and  spirit 


AID   TO    RAILROADS    UNCONSTITUTIONAL.  115 

of  our  constitutions,  both  state  and  national.  The  legislature, 
by  the  passage  of  such  a  statute,  says,  in  substance,  to  the  tax 
payer:  "A  company  is  formed  for  the  purpose  of  building  a 
railroad  which  passes  through  the  county  in  which  you  reside. 
This  company  has  not  sufficient  means  for  constructing  and 
stocking  its  road.  That  the  necessary  means  may  be  furnished 
to  it  for  that  purpose,  you  must  pay  a  tax  upon  your  property, 
amounting  to  one-tenth  or  one-twentieth  of  its  value;  this 
amount  you  must  donate  to  the  company.  True,  you  will 
have  no  interest  in  this  road  when  it  is  completed ;  you  will 
not  be  a  stockholder ;  you  cannot  ride  in  its  cars,  or  ship  your 
freights  'over  the  road,  without  paying  the  same  price  as  other 
persons.  It  may  cause  you  to  sacrifice  a  part  of  your  property 
to  pay  this  tax,  but  the  road  will  be  of  great  advantage  to  the 
public,  and  you  must  make  this  donation  to  help  the  enter 
prise."  The  consequences  flowing  from  this  unjust  and 
oppressive  system  of  taxation  are  appalling.  It  has  no  foun 
dation  in  right  or  justice.  The  legislature  has  no  inherent 
right  to  impose  taxes  for  any  purpose.  The  authority  to  levy 
taxes  is  dependent  upon  the  power  delegated  by  the  people  as 
contained  in  the  fundamental  law.  In  a  republic  even  a  ma 
jority  of  the  people  do  not  possess  the  inherent  right  to  tax  the 
minority  for  private  purposes.  Such  taxation  can  be  imposed 
by  no  other  government  than  a  despotic  one,  where  the  will  of 
the  despot  is  the  supreme  law,  and  where  might  rather  than 
right  is  the  controlling  power.  So  conscious  are  the  advocates 
of  this  species  of  taxation  of  the  fact  that  taxes  can  be  levied 
for  public  purposes  alone,  that  they  deem  it  all-important  to 
connect  and  blend  in  one  —  the  right  of  eminent  domain  and 
taxation. 

But  this  position  is  not  tenable.  Bouvier  defines  the 
term,  "  Eminent  Domain,"  as  follows  :  u  The  right  which  the 
people  or  government  retains  over  the  estate  of  individuals,  to 
resume  the  same  for  public  use."  Taxes  are  defined  to  be 
burdens  or  charges  imposed  by  the  legislative  power  of  a  state, 
upon  persons  or  property,  to  raise  money  for  public  purposes. 
It  will  be  seen  that  there  is  a  wide  distinction  between  the 
taxing  power  and  the  right  of  eminent  domain :  that  while 
they  both  appropriate  private  property  for  public  uses,  they 


116  MONOPOLIES   AND   THE   PEOPLE. 

differ  in  degree.  While  the  right  of  eminent  domain  takes 
from  the  private  citizen  the  absolute  title  to  property  upon  just 
and  fair  compensation,  taxation  exacts  from  each  property 
owner  a  contribution  for  the  support  of  the  government,  or  for 
the  benefit  of  the  public,  without  any  other  compensation  than 
the  protection  the  government  affords  him  in  life,  liberty,  and 
property.  Contribution  for  this  purpose  is  a  duty  imposed 
upon  all  who  are  under  the  protection  of  government.  A 
complete  power  to  procure  a  regular  and  adequate  supply  of 
revenue  forms  an  indispensable  article  in  our  constitution ; 
and  provisions  for  levying  and  collecting  this  revenue  is  a 
charge  laid  upon  the  legislative  department.  The  levy  and 
collection  of  all  taxes  deemed  necessary  for  the  administration 
of  the  government  and  for  the  public  good,  is  an  incident  of 
sovereignty ;  but  this  does  not  extend  to  the  levy  and  collec 
tion  of  taxes  to  aid  private  interests  or  enterprises.  The  tax 
ing  power  is  limited ;  the  needs  of  the  public  fix  this  limit. 
When  this  is  passed,  the  citizen  is  subject  to  continual  plun 
der.  The  value  of  his  property  is  destroyed  ;  he  is  but  a  trus 
tee  holding  his  property  subject  to  the  will  of  an  arbitrary 
power,  that  can  at  any  moment  call  for  a  part  or  all  of  it.  He 
had  entered  into  a  governmental  contract  for  the  purpose  of 
appealing  to  the  strong  arm  of  constitutional  law  when  his 
rights  are  assailed,  but  finds,  instead  of  the  protection  he  had 
reason  to  expect,  an  irresponsible,  arbitrary,  power,  compelling 
him  to  divide  his  property  with  railroad  corporations,  or  other 
private  parties,  without  any  consideration  ;  not  only  without 
consideration,  but  the  taxes  illegally  and  forcibly  taken  from 
him  are  used  to  build  up  and  protect  a  monopoly  that  is  blast 
ing  the  fruit  of  his  labor,  while  it  is  as  surely  destroying  con 
stitutional  and  republican  government.  His  property  is  taken 
from  him  by  what  can  only  be  termed  a  superior,  despotic, 
power,  and  appropriated  without  his  consent  for  the  benefit 
of  a  private  corporation. 

It  is  not  difficult  to  distinguish  what  are  proper  objects  of 
public  support  and  for  which  taxes  can  be  levied  and  collected 
from  those  that  are  not,  if  we  keep  in  sight  the  fundamental 
or  organic  law.  In  the  formation  of  a  republic  no  new  rights 
are  created.  The  adoption  of  a  constitution  is  but  declaratory 


AID   TO   RAILROADS   UNCONSTITUTIONAL.  117 

of  pre-existing  rights  and  laws ;  its  object  is  to  define  and 
limit  the  powers  of  the  government,  and  to  guard  and  protect 
the  rights  of  the  citizens.  An  eminent  jurist,  in  speaking  of 
the  constitution,  uses  the  following  clear  and  forcible  lan 
guage  :  "  It  is  not  the  beginning  of  a  community,  nor  the 
origin  of  private  rights;  it  is  not  the  fountain  of  law,  nor  the 
incipient  state  of  government ;  it  is  not  the  cause,  but  the  con 
sequence,  of  personal  and  political  freedom  ;  it  grants  no  rights 
to  the  people,  but  is  the  creation  of  their  power,  the  instru 
ment  of  their  convenience,  designed  for  their  protection  in  the 
enjoyment  of  the  rights  and  powers  which  they  possessed  be 
fore  the  constitution  was  made ;  it  is  but  the  frame-work  of 
the  political  government,  and  necessarily  based  upon  the  pre 
existing  condition  of  laws,  rights,  habits,  and  modes  of 
thought.  There  is  nothing  primitive  in  it ;  it  is  all  derived 
from  a  known  source.  It  pre-supposes  an  organized  society, 
law,  order,  property,  personal  freedom,  a  love  of  political  lib 
erty,  and  enough  of  cultivated  intelligence  to  know  how  to 
guard  it  against  the  encroachments  of  tyranny.  A  written 
constitution  is,  in  every  instance,  a  limitation  upon  the  powers 
of  the  government  in  the  hands  of  agents,  for  there  never  was 
a  written  republican  constitution  which  delegated  to  function 
aries  all  the  latent  powers  which  lie  dormant  in  every  nation,  and 
are  boundless  in  extent,  and  incapable  of  definitions."  Keep 
ing  in  mind  the  distinction  existing  between  measures  of  a 
governmental  or  public  nature,  and  those  that  are  private,  and 
applying  the  above  quoted  definition  of  constitutional  power, 
we  cannot  find  it  difficult  to  determine  what  are,  and  what  are 
not,  constitutional  levies  and  collection  of  taxes. 

Another  thought  having  weight  in  connection  with  the  con 
stitutional  right  to  tax  the  people  in  aid  of  railroads,  is,  that 
minorities  have  the  right  to  live,  and  to  own  and  enjoy  prop 
erty  ;  and  the  majority  has  no  right  to  compel  the  minority  to 
contribute  aid  to  railroad  corporations.  It  has  always  been 
conceded  that  in  a  republican  government  the  majority  should 
rule,  and  that  their  will  expressed  in  a  constitutional  and  legal 
manner  should  be  the  law  of  the  land ;  yet  no  one  claiming  to 
respect  constitutional  law  will  contend  that  this  will  of  the 
majority  can  act  outside,  or  independent  of,  constitutional  re- 


118  MONOPOLIES   AND   THE   PEOPLE. 

strictions.  If  this  doctrine  should  obtain,  constitutional  gov 
ernment  is  at  an  end ;  private  rights  are  destroyed,  and  the 
unrestricted  will  of  a  bare  majority  becomes  supreme ;  all 
the  guarantees  of  the  constitution  are  annulled ;  life,  liberty, 
and  property,  are  all  dependent  upon  the  popular  will;  consti 
tutional  safeguards  are  destroyed,  and  the  stability  of  the  gov 
ernment  is  lost.  The  first  step  in  this  direction  is  fraught 
with  the  greatest  danger.  When  the  restrictions  embodied  in 
the  constitution  are  overridden  and  disregarded  in  one  in 
stance  it  affords  a  precedent  for  a  second  6  iep  in  the  same  di 
rection.  Acquiescence  in  encroachments  upon  constitutional 
restriction  by  the  people,  undermine  mid  absolutely  destroy 
republican  institutions  and  the  government  itself.  If,  for  the 
accomplishment  of  some  private  purpose,  a  community,  a  state, 
or  the  general  government  disregard  the  provisions  of  the 
constitution,  and  assume  powers  not  granted  them  by  that  in 
strument,  they  arbitrarily  act  the  part  of  the  absolute  tyrant. 
And  it  makes  no  difference  whether  the  course  pursued,  or  the 
measure  adopted,  proves  beneficial  to  the  public,  or  oppressive. 
In  the  fact  that  it  is  the  usurpation  of  an  unauthorized  power, 
lies  the  danger.  The  disregard  of  the  limits  fixed  by  the  con 
stitution,  in  the  administration  of  the  government,  destroys 
the  only  guarantee  the  people  have  for  the  protection  of  their 
private  rights.  Among  all  the  unconstitutional  measures 
which  now  obtain  throughout  the  country,  the  affording  of  aid 
to  railroads,  by  the  government,  state  and  national,  has  proved 
the  most  burdensome  to  the  people.  Of  this  class  of  subsidies, 
that  afforded  by  local,  municipal  subscription,  with  or  without 
a  vote  of  the  people,  has  caused  the  greatest  injury.  A  local 
or  municipal  government  can  lawfully  impose  taxes  for  the 
support  of  its  administration,  and  for  contribution  to  the  gen 
eral  comfort  and  happiness  of  the  people.  It  can  tax  for  the 
purpose  of  laying  out  and  constructing  streets  and  public 
highways,  because  these  objects  are  intended  to  be,  and  in  fact 
are,  open  to  the  use  of  the  whole  people ;  all  can  use  them  on 
equal  terms ;  they  are  made  for  the  benefit  of  the  public ;  each 
citizen  has  undertaken  to  contribute  his  just  proportion  of  the 
expense  of  providing  for  the  common,  public  benefit.  But 
when  a  county,  a  city,  town,  or  township,  organized  for  the 


AID    TO    RAILROADS    UNCONSTITUTIONAL. 

convenience  of  the  people,  and  to  more  effectually  protect 
their  rights,  attempts  to  become  a  stockholder  in  a  railroad 
corporation,  it  attempts  the  exercise  of  a  power  it  does  not 
and  cannot  possess  under  the  constitution.  Municipal  corpo 
rations  were  not  created  for  the  purposes  of  private  specula 
tion  or  private  gain,  hut  for  purely  and  strictly  government 
purposes.  No  power  is  granted  (nor  can  it  be  implied)  to 
county  judges,  commissioners,  or  supervisors,  nor  to  township 
trustees,  or  city  boards,  to  take  stock  in  railroad  corporations, 
or  to  issue  bonds  of  the  municipality  in  payment  for  such 
stock,  for  the  reason  that  such  power  is  not  necessary  for  the 
administration  of  these  several  governments,  and  does  not 
come  within  the  limit  of  the  powers  granted  by  the  people. 
We  know  there  are  many  decisions  of  courts  sustaining  the 
position  that  municipal  corporations  can  become  stockholders 
in  railroads,  and  may  issue  bonds  in  payment  therefor,  and 
that  it  is  within  the  scope  of  the  powers  vested  in  such  corpo 
rations  to  levy  taxes  for  the  payment  of  the  bonds  so  issued  ; 
but  we  have  yet  to  see  a  decision  that  is  sustained  by  any  pro 
vision  of  the  constitution.  Many  of  these  decisions  admit 
that  the  right  to  subscribe  stock  is  not  contained  in  the  consti 
tution,  and  cannot  be  justified  on  constitutional  grounds.  Of 
these  decisions  we  shall  speak  hereafter,  and  we  leave  them 
for  the  present.  We  insist  that  there  is  no  authority  in  the 
constitutions,  state  or  national,  under  which  any  department 
of  any  of  the  governments  can  become  stockholders  in  a  rail 
road  corporation ;  nor  is  the  right  to  take  such  stock  in  ac 
cordance  with  the  genius  or  spirit  of  republican  government. 
The  distinction  that  exists  between  cities  and  towns  acting 
under  charters,  and  counties,  townships,  school  and  road  dis 
tricts,  is  marked,  and  should  be  kept  in  mind  in  considering  the 
nature  of  the  powers  possessed  by  each.  County,  township, 
school,  and  road  district  organizations  are  necessary  in  the  ad 
ministration  of  the  laws  of  the  state.  They  are  at  most  but 
quasi  corporations ;  all  their  powers  are  derived  from,  and  exe 
cuted  under,  the  general  statutes  of  the  state.  They  have  no 
special  grants  or  privileges,  but  are  the  chosen  means  for  exe 
cuting  state  laws.  In  the  distribution  of  the  powers  and  duties 
vested  in  and  imposed  upon  the  state  governments,  the  duties 


120  MONOPOLIES   AND   THE    PEOPLE. 

of  administering  the  local  affairs  of  the  counties,  townships, 
and  districts,  are  delegated  to,  and  imposed  upon,  these  quasi 
corporations  respectively.  They  can  only  exercise  such  pow 
ers  as  are  necessary  for  the  accomplishment  of  the  objects  of 
their  creation.  Their  acts  are  the  acts  of  the  state  govern 
ment  as  applied  to  their  respective  localities.  They  are  not 
clothed  with  any  extraordinary  power ;  nor  can  the  state  gov 
ernment  delegate  to  them  a  power  it  does  not  itself  possess. 
When  the  constitution  of  a  state  (as  in  the  case  of  Iowa  and 
other  states)  prohibits  the  state  from  subscribing  stock,  loan 
ing  its  credit,  or  issuing  its  bonds  to  private  corporations,  we 
would  at  once  conclude  that  it  could  not  delegate  authority  to 
one  of  its  subordinate  departments  to  do  an  act  forbidden  to 
itself  by  the  constitution.  But  this  is  what  it  has  done,  if 
these  quasi  corporations  possess  the  power  to  afford  aid  to  rail 
road  or  other  private  enterprises.  Municipal  corporations, 
such  as  cities,  towns,  &c.,  act  under  special  charters,  and  in 
some  respects  are  sovereign.  But  they  are  governed  and  con 
trolled  as  absolutely  by  the  provisions  of  their  charters,  as  is 
the  state  by  its  constitution.  They  can  only  act  within  the 
scope  of  their  delegated  powers,  and  in  all  doubtful  questions 
the  presumption  is  against  their  right  and  in  favor  of  the  pub 
lic,  for  the  reason  that  only  special  privileges  are  conferred 
upon  them.  Nor  can  the  legislature  confer  upon  them  privi 
leges  or  powers  not  possessed  by  itself  under  the  constitution. 
It  is  then  absolutely  certain  that  neither  counties,  cities,  nor 
towns  can  aid  private  corporations,  or  become  stockholders  in 
such  corporations,  unless  the  power  has  been  delegated  to 
them  by  the  state  legislature.  It  is  equally  certain  that  unless 
the  state,  in  its  sovereign  capacity,  possesses  this  power,  it 
cannot  delegate  it  to  either  counties  or  cities,  and  that  when 
the  constitution  of  a  state  forbids  the  exercise  of  a  power,  it 
includes  the  legislature,  all  the  departments  of  the  state  gov 
ernment,  all  counties,  cities,  and  towns,  and  all  the  people. 
All  these  corporations  are  agencies  in  the  administration  of 
the  affairs  of  the  public.  Being  political  in  their  nature,  they 
are  entirely  distinct  from  private  corporations  organized  for 
the  purpose  of  pecuniary  profit.  They  are  established  for 
public  purposes  exclusively.  Judge  Dillon,  in  his  valuable 


AID   TO   RAILROADS    UNCONSTITUTIONAL.  121 

work  on  municipal  corporations,  says  that  "  They  can  exercise 
the  following  powers,  and  no  others :  First,  those  granted  in 
express  words.  Second,  those  necessarily  or  fairly  implied, 
or  incident  to  the  powers  expressly  granted.  Third,  those 
essential  to  the  declared  objects  and  purposes  of  the  corpora 
tion — not  simply  convenient,  but  indispensable."  The  same 
author,  in  treating  upon  aid  to  railroads,  while  admitting  that 
the  current  of  judicial  decision  is  in  favor  of  the  principle 
that  in  the  absence  of  special  constitutional  restrictive  provis 
ions,  it  is  competent  for  the  legislature  to  grant  this  power  to 
municipal  corporations,  says  that  "  Notwithstanding  the  opin 
ions  of  so  many  learned  and  eminent  judges,  there  remains 
serious  thought  as  to  the  soundness  of  the  principle,  viewed 
simply  as  one  of  constitutional  law.  Regarded  in  the  light  of 
its  effects,  however,  there  is  little  hesitation  in  affirming  that 
this  invention  to  aid  private  enterprises  has  proved  itself 
baneful  in  the  last  degree,"  and  he  adds :  "  Taxes,  it  is  every 
where  agreed,  can  only  be  imposed  for  public  objects,  and  tax 
ation  to  aid  in  building  the  roads  of  private  railway  compa 
nies  is  .hardly  consistent  with  a  proper  respect  for  the  inviola 
bility  of  private  property  and  individual  rights.  Fraud  usually 
accompanies  its  exercise,  and  extravagant  indebtedness  is  the 
result,  and^sooner  or  later  the  power  will  be  denied  either  by 
constitutional  provision  (as  in  Pennsylvania,  Ohio,  and  Illinois, 
it  already  is)  or  by  legislative  enactment." 

As  we  are  now  dealing  with  constitutional  rights,  and  not 
with  judicial  decisions,  we  think  we  have  fully  shown  that 
public  or  municipal  corporations  have  no  authority  under  the 
constitution  to  aid  railroads  by  subscription  of  stock,  or  the 
issue  of  bonds,  and  that  no  authority  exists  for  taxing  the  peo 
ple  to  pay  for  such  stock  or  bonds ;  and  if  it  be  true  that 
counties  and  cities  are  not,  and  cannot  be,  clothed  with  the 
power  to  aid  in  the  prosecution  of  private  enterprises,  it  is 
equally  true  that  the  legislature  cannot  delegate  to  the  major 
ity  of  the  voters  of  a  county,  city,  township,  or  district,  the 
authority  to  tax  the  minority  for  the  same  purpose.  Legisla 
tures  cannot  create  new  powers ;  they  can  only  exercise  such 
as  they  possess  under  the  constitution.  The  powers  not  dele 
gated  by  the  Deople  in  the  fundamental  law,  are  retained  by 
15 


122  MONOPOLIES   AND   THE   PEOPLE. 

them.  If  the  people  are  sovereign,  they  are  the  source  of 
power,  and  all  that  is  not  vested  in  some  department  of  the 
government  remains  vested  exclusively  in  the  sovereign.  If 
the  legislative,  executive,  or  judicial  department  of  the  gov 
ernment  can  act  independently  of  the  restrictions  and  prohi 
bitions  contained  in  the  constitution,  then  the  will  of  the  ser 
vants  of  the  people  is  the  supreme  law,  and  the  sovereign 
power  supposed  to  reside  in  the  people  is  destroyed,  and  con 
stitutional  government  is  at  an  end.  Oppressive  taxation  im 
posed  without  authority,  for  private  and  selfish  ends,  if  per 
sisted  in,  will  eventually  subvert  our  republican  institutions. 
This,  and  other  unconstitutional  legislation,  to  some  of  which 
we  have  already  referred,  has  caused  such  a  departure  from 
the  old  landmarks  that  it  is  questionable  if  we  now  have,  in 
fact,  a  republican  government.  Under  the  rules  adopted  in 
legislation,  and  the  pliant  decisions  of  courts,  constitutions  are 
made  to  yield  to  the  demands  of  combinations,  stock-jobbers, 
and  private  corporations,  until  we  cease,  as  a  people,  to  revere 
and  respect  these  safeguards  of  our  liberty. 


CHAPTER  XIII. 

THE  FATAL  POLICY  OF  MORTGAGING  CITIES  AND  COUNTIES  FOR  THE 
CONSTRUCTION    OF   RAILROADS. 

THE  justification  for  the  munificent  grants  and  lavish  taxa 
tion  of  the  people  in  aid  of  railroads  has  been,  that  these 
roads  afford  the  necessary  facilities  for  transportation  of 
freight,  promote  speedy  communication  throughout  the  coun 
try,  provide  ready  markets  for  the  products  of  husbandry,  in- 
cvease  the  value  of  property  in  their  vicinity,  and  assist  in  im 
proving  and  developing  the  new  portions  of  our  country. 
While  some,  or  all,  of  these  objects  may  have  been  in  a  degree 
promoted,  the  little  good  thus  accomplished  has  been  more 
than  counterbalanced  by  the  evils  uniformly  attending  this 
species  of  aid  to  railroads.  What  are  the  evils  incident  to  the 
general  incorporation  acts,  and  local  taxation  in  favor  of  rail 
roads? 

.First.  They  take  from  the  individual  the  natural  and  con 
stitutional  right  of  owning  and  controlling  his  own  property, 
and  license  the  agents  of  a  county,  city,  or  town,  to  incumber 
his  property  with  a  debt,  without  his  consent  and  against  his 
protest. 

Second.  The  policy  engenders  a  rivalry  between  different 
localities,  causing  reckless  extravagance  and  the  creation  of 
an  immense  indebtedness  by  public  corporations.  This  in 
debtedness  not  unfrequently  retards  the  settlement  of  the  local 
ity  expected  to  be  benefited,  and  depreciates  instead  of  enhanc 
ing  the  value  of  property,  ibr  the  constant  and  compulsory 
drain  of  the  resources  of  the  place  in  payment  of  the  debt  thus 
created  can  leave  nothing  but  barrenness  behind,  the  rule  be 
ing,  with  but  few  exceptions,  that  non-residents  hold  the  evi 
dences  of  the  indebtedness,  and  as  a  consequence,  payment 
must  be  made  to  distant  creditors.  If  one  thinks  that  this  is 


124  MONOPOLIES   AND   THE    PEOPLE. 

overdrawing  the  picture,  let  him  examine  the  condition  of 
those  counties  and  cities  that  years  ago  loaned  their  credit  to 
railroad  companies,  or  subscribed  to  their  capital  stock.  Lo 
calities  less  favorably  situated,  with  fewer  natural  advantages, 
fewer  miles  of  railroad,  and  with  less  productive  countries 
tributary  to  their  growth,  h.ave  far  outstripped  their  bonded 
neighbors  in  wealth,  improvements,  and  the  increased  value  of 
their  property.  Persons  who  are  seeking  locations  dread  and 
shun  these  \xmd-cursed  localities,  and  seek  homes  elsewhere. 
New  counties  far  outstrip  these  old  ones  in  improvement  and 
wealth ;  new  towns  and  cities  spring  up  and  destroy  the  busi 
ness  of  these  old  bond-ridden  ones,  and  the  latter,  instead  of 
receiving  the  anticipated  and  promised  increase  of  wealth, 
show  a  paralyzed  industry  and  depreciated  property.  Locali 
ties  that  fifteen  or  twenty  years  ago  gave  promise  of  a  pros 
perous  future,  are  less  wealthy,  less  prosperous,  and  in  some 
instances  less  populous  than  when  they  subscribed  stock,  and 
issued  bonds  to  railroads.  For  years  to  come,  the  wealth  and 
industry  of  these  places  must  suffer  from  the  incubus  of  enor 
mous  taxes  levied  for  the  payment  of  bonds  issued  under  the 
mistaken  idea  that  great  benefit  was  to  result  from  the  indebt 
edness. 

Third.  It  places  the  pecuniary  interests  of  all  of  the  people 
of  the  counties  and  cities  creating  this  kind  of  indebtedness  in 
the  hands  of  unscrupulous  and  relentless  non-resident  credi 
tors,  mainly  Wall  Street  stock-jobbers,  who  obtained  it  at 
large  discounts,  often  at  one-fourth  its  par  value,  and  who  own 
not  only  the  county  and  city  bonds,  but  control  the  railroads 
in  aid  of  which  they  were  issued,  and  so  by  constantly  collect 
ing  from  the  people  the  appressive  taxes  required  to  pay  the 
interest  and  principal  of  these  bonds,  withdrawing  the  amounts 
so  collected  from  circulation  and  sending  it  to  the  east  without 
leaving,  or  ever  having  paid  any  equivalent,  they  are  constant 
ly  impoverishing  the  people  with  the  very  means  which  were 
to  have  been  sources  oi  prosperity. 

Fourth.  The  aid  granted  to  railroad  companies  has  enabled 
them  to  get  control  of  the  commerce  of  the  country.  As  a 
general  rule,  all  of  the  railroads  receiving  subsidies  in  land, 
government,  state,  county,  and  city  bonds,  and  large  gifts  in 


RAILROAD    MORTGAGES   ON   COUNTIES  AND   CITIE8.  125 

local  taxes,  have  been  owned  or  controlled  by  the  same  class 
of  men,  and  not  a  few  of  the  roads  by  the  same  ring  or  com 
bination.  Then  speculators  have  visited  all  parts  of  the  coun 
try,  claiming  to  be  men  of  "large  hearts"  who  desire  to  bene 
fit  mankind.  They  talk  of  their  large  experience  in  railroad 
matters ;  of  the  great  benefit  the  particular  locality  will  derive 
from  the  construction  of  a  certain  line  of  road;  of  the  great 
profit  to  be  returned  in  the  shape  of  dividends  if  local  aid  is 
voted,  and  after  having  by  fraud,  falsehood,  and  willful  decep 
tion  induced  the  people  to  move  in  the  matter,  they  then  turn 
their  attention  to  state  legislatures  and  to  congress  for  more 
aid,  and  so  perfect  is  their  combination,  that  in  almost  all 
their  attempts  they  are  successful.  Among  these  rings  and 
combinations  are  found  men  to  fill  every  department  in  the 
scheme  for  plundering  the  people.  Some  of  them  become  di 
rectors  in  the  corporations  to  which  the  aid  is  voted  and  grant 
ed,  and  they  thus  get  control  of  the  donations,  grants,  and 
bonds.  Some  members  of  the  ring  become  agents  to  sell  the 
bonds  of  the  corporation,  as  well  as  any  others  received  from 
the  general  or  local  government,  and  to  mortgage  the  lands 
granted  to  the  companies.  Still  another  division  of  the  ring 
become  the  purchasers  of  the  bonds  at  their  market  value. 
They  all  unite  in  this  way  and  mortgage  their  roads,  rights, 
and  franchises,  and  construct  the  road,  taking  care  that  when 
the  road  is  completed,  the  liabilities  resting  upon  it  shall  be 
sufficient  to  represent  its  entire  value.  By  this  means  they  be 
come  the  creditors  of  the  counties  and  towns  through  which 
the  road  runs;  they  own  and  control  the  road;  and  the  com 
bination  being  the  same  substantially  throughout  the  country, 
owning  and  controlling  all  the  roads,  holding  and  using  the 
subsidy  bonds,  fixing  the  rates  of  freight  and  passenger  trans 
portation,  they  control  the  whole  country  and  hold  the  best 
interests  of  the  people  subject  to  their  will.  In  the  prosecu 
tion  of  their  ends  they  bribe  local  officers,  state  legislatures, 
and  members  of  congress.  To  secure  the  election  of  their 
friends  to  congress,  large  gifts  are  made.  In  one  instance 
one  of  these  raiders  upon  the  rights  of  the  people  bestowed 
upon  a  prospective  United  States  senator,  $10,000,  for  the  pur 
pose,  as  he  stated,  of  securing  friendly  legislation  for  a  certain 


126  MONOPOLIES   AND  THE   PEOPLE. 

railroad  company.  The  pirates  and  robbers  who  prey  upon 
mankind  are  not  more  dishonest  or  unscrupulous  than  are 
these  rings  who  make  the  people  their  prey.  They  differ  only 
in  the  degree  of  punishment  received;  the  former  being  exe 
cuted  or  sent  to  prison,  while,  of  the  latter,  many  are  elected 
to  congress  or  to  other  high  and  responsible  offices,  or  they 
are  appointed  to  high  places  of  trust  and  profit  in  the  govern 
ment.  If  the  reader  will  look  through  the  Railroad  Manual, 
he  will  find  a  long  list  of  names  of  men,  prominent  now  from 
the  recent  raids  upon  the  people  and  public  treasury,  who 
have  been  engaged  in  the  same  business  for  at  least  twenty 
years;  men  whose  names  are  now  as  familiar  to  the  western 
people  as  "  household  words,"  who,  like  birds  of  prey,  have 
flitted  from  one  part  of  the  country  to  another  until  their 
blighting  influence  is  felt  in  the  whole  land.  We  are  refer 
ring  of  course  to  the  men  who  have  followed  the  business  of 
"organizing"  railroad  companies  for  the  purpose  of  procur 
ing  aid  in  lands,  bonds,  and  taxes,  and  who  have  devoted  their 
energies  to  this  class  of  railroads,  and  not  to  those  capitalists 
who,  with  their  own  money  and  credit,  have  constructed  their 
roads  and  pursued  a  legitimate  business.  Prominent  among 
the  men  who  have  devoted  their  time  and  talents  to  railroad 
enterprises,  will  be  found  the  names  of  Thomas  C.  Durant, 
John  A.  Dix,  Henry  Farnham  and  others,  whose  memory  will 
remain  fresh  with  western  men,  because  of  their  diligence  in 
procuring  local  aid  to  railroad  companies  from  counties  and 
cities  fifteen  or  twenty  years  ago,  and  who,  after  obtaining  such 
aid,  by  some  means  became  the  owners  of  city  and  county 
bonds,  to  a  large  amount,  and  then  to  prompt  the  people  to 
greater  diligence  in  the  payment  of  taxes,  levied  to  liquidate 
these  bonds,  applied  to  the  president  of  the  United  States  for 
troops  to  aid  in  their  collection.  Slightly  varied,  the  same  or 
ganization  of  men  which  inaugurated  the  system  of  construct 
ing  railroads  through  land  grants,  donations,  and  subsidies,  is 
still  in  the  same  business.  With  their  headquarters  in  New 
York  and  Boston;  with  Wall  Street  as  the  principal  depot  for 
all  railroad  stockfc  and  bonds,  as  well  as  the  bonds  of  the  Uni 
ted  States,  and  of  such  states,  counties,  and  cities  as  have  been 
duped  by  them,  these  raiders  upon  the  treasury  and  resources 


RAILROAD   MORTGAGES   ON   COUNTIES  AND   CITIES.  127 

of  a  people  have  taken  the  absolute  control  of  the  railroad  in 
terest  of  the  country  ,*and  "run  it"  for  their  own  exclusive  ben 
efit,  to  the  injury  of  the  country  and  the  absolute  destruction 
of  the  agricultural  interests  of  the  great  west.  By  having 
placed  in  their  hands  the  large  grants  of  land  and  subsidies 
voted  to  railroad  corporations,  they  acquired  the  means  of  con 
trolling  the  principal  roads  throughout  the  country.  Roads  in 
Texas,  Louisiana,  Alabama,  Arkansas,  Kansas,  Nebraska, 
Iowa,  and  in  other  states  and  territories,  are  owned  and  man 
aged  in  the  exclusive  interest  of  capitalists  in  the  eastern  cities 
who  have  no  interest  in  the  communities  where  these  roads 
are  located,  save  to  realize  large  dividends  by  extortions  and 
oppressions.  All  of  the  roads  receiving  large  grants  and  sub 
sidies,  whether  from  the  general  or  state  government,  or  as 
local  aid,  are  in  the  hands  of  this  class  of  men,  with  their  fis 
cal  and  transfer  agencies  in  the  cities  above  named. 

This  statement  has  its  illustration  in  the  Kansas  City,  St. 
Joseph,  &  Council  Bluffs  company,  which  has  five  directors  in 
Boston,  two  in  New  York,  one  in  Michigan,  and  one  in  Mis 
souri —  Fiscal  agency  and  transfer  office,  Boston.  Peoria  & 
Bureau  Valley  company  has  its  principal  office  in  New  York ; 
Chicago  &  Northwestern — Financial  and  transfer  office,  Wall 
street,  New  York ;  Dubuque  &  Southwestern  —  all  of  the  di 
rectors,  save  one,  and  its  financial  agency,  in  New  York  ; 
Atchinson,  Topeka,  &  Santa  Fe  company  —  fiscal  agency  and 
transfer  office,  Boston ;  Galveston,  Harrisburg,  &  San  Antonio 
company  —  Fiscal  and  transfer  agency,  Boston ;  Leavenworth, 
Lawrence,  &  Galveston  company — Fiscal  agency  and  transfer 
office,  Boston ;  Kansas  City  &  Sante  Fe  company  —  Fiscal  and 
transfer  agency,  Boston ;  Cedar  Falls  &  Minnesota  company — 
All  of  the  directors  reside  in  New  York ;  Iowa  Falls  &  Sioux 
City  company — Of  the  directors,  John  B.  Alley,  Oliver  Ames, 
P.  S.  Crowell,  and  W.  T.  Gilden,  reside  in  Massachusetts, 
J.  I.  Blair  in  New  Jersey,  and  W.  B.  Allison  and  Horace 
"Williams  in  Iowa — Fiscal  and  transfer  agency,  Boston;  Col 
orado  Central  company — Of  the  directors,  Oliver  Ames,  Fred 
erick  L.  Ames,  and  four  others,  reside  in  Massachusetts,  and 
the  fiscal  agency  is  in  Boston,  and  the  principal  office  in  Cali 
fornia  ;  Cedar  Rapids  and  Missouri  River  company  —  John 


128  MONOPOLIES   AND   THE   PEOPLE. 

B.  Alley,  Oliver  Ames,  and  nine  other  of  the  directors  are  in 
the  eastern  states,  and  James  F.  Wilson,  and  three  others,  are 
of  Iowa ;  Northern  Pacific  company  —  Principal  office,  New 
York ;  Hannibal  &  St.  Joseph  company  —  Fiscal  and  trans 
fer  office,  New  York ;  Burlington  &  Missouri  River  compa 
ny  —  Fiscal  and  transfer  office,  New  York ;  Union  Pacific 
(central  branch)  —  All  but  two  of  the  directors  in  Washington 
City  and  the  east,  and  principal  office  in  New  York ;  Union 
Pacific  —  Among  the  directors  are  Oliver  Ames,  Oakes  Ames, 
and  eleven  others  in  New  York  and  Massachusetts,  one  in 
Illinois,  and  G.  M.  Dodge  in  Iowa  —  Fiscal  agency,  Boston ; 
transfer  offices,  Boston  and  New  York ;  Fremont,  Elkhorn, 
&  Missouri  Valley  company  —  John  B.  Alley,  of  Boston,  John 
I.  and  D.  C.  Blair,  of  New  Jersey,  C.  G.  Mitchell,  of  New 
York,  and  three  Cedar  Rapids  men,  directors  (this  is  a  part  of 
the  Sioux  City  &  Pacific  road) ;  Winona  &  St.  Peters  compa 
ny  —  Fiscal  and  transfer  office,  Wall  street,  New  York ;  Bur 
lington  &  Missouri  River  (in  Nebraska)  —  Principal  office, 
Boston  ;  Sioux  City  &  Pacific  company  —  Directors  :  Oakes 
Ames,  and  six  others,  in  the  east,  and  G.  M.  Dodge,  of  Iowa 
—  Fiscal  and  transfer  office,  Boston  ;  Missouri  River,  Fort 
Scott,  &  Gulf  company  —  Fiscal  and  Transfer  office,  Boston ; 
Central  Pacific  company  —  Fiscal  offices,  San  Francisco  and 
New  York;  *New  Orleans,  Mobile,  &  Texas  company  — 
Oakes  Ames  and  twelve  other  directors,  resident  in  New  York 
and  the  east,  and  two  in  New  Orleans ;  principal  office,  New 
York ;  Houston  &  Texas  company — Fiscal  agency  and  trans 
fer  office,  New  York ;  Chicago  &  Northern  Pacific  Air  Line 
company  —  Principal  office,  New  York ;  Elizabeth,  Lexing 
ton,  &  Big  Sandy  company  —  Principal  office,  New  York; 
Dubuque  &  Sioux  City  company  —  General  offices,  Dubuque, 
Iowa,  and  New  York.  fTexas  and  Pacific  company  —  Prin 
cipal  office,  New  York. 


*  NOTE.— This  company  has  a  donation  from  the  state  of  Louisiana  of  $3,000,000 ;  a  sub 
scription  of  stock  by  the  same  state  to  the  amount  of  $2,500,000 ;  and  the  same  state  has  in 
dorsed  the  company's  bonds  to  the  amount  of  $12,500  per  mile.  This  company  has  also  re 
ceived  other  large  sums  in  municipal  aid  and  other  donations. 

t  NOTE.— This  company  has  a  grant  of  18,440,000  acres  of  land,  and  other  aid. 


RAILROAD    MORTGAGES    ON    COUNTIES   AND    CITIES.  129 

We  might  continue  the  above  list  indefinitely,  but  think  we 
have  extended  it  sufficiently  to  sustain  our  charges.  If  the 
reader  is  desirous  of  learning  who  compose  these  various  com 
panies,  the  Railroad  Manual  will  disclose  the  same  set  of  lead 
ing  men,  divided  into  three  or  four  principal  squads  or  com 
panies,  who  raid  from  one  end  of  the  country  to  the  other ; 
control  all  the  roads  that  have  received  aid,  and  at  once  place 
them  under  the  direction  of  the  central  railroad  combinations 
in  Boston  and  'New  York ;  diverting  the  grants  and  donations 
supposed  to  have  been  made  for  the  benefit  and  in  the  interest 
of  the  people,  to  their  own  selfish  purposes ;  making  the  aid 
thus  granted  a  means  of  oppression  to  the  people,  rather  than 
an  agency  for  their  relief. 


16 


CHAPTER  XIV. 

THE   IMPOVERISHING   TRANSPORTATION    SYSTEM. — THE 
WAREHOUSE    CONSPIRACY. 

ONE  of  the  great  evils  resulting  from  this  bonded  subsidy 
system  of  building  railroads,  is  that  it  gives  to  those  who 
manage  them  the  control  of  the  whole  carrying  trade  of 
the  country,  and  enables  them  to  impoverish  the  great  agricul 
tural  population  of  the  west  and  south.  The  wealth  of  the 
United  States  lies  in  its  agricultural  products.  The  greater 
portion  of  the  people  are  engaged  in  agricultural  pursuits. 
Good  markets  and  cheap  freights  are  of  the  utmost  importance 
to  agriculture.  However  abundant  may  be  the  crops,  unless  a 
market  can  be  reached  without  a  sacrifice  of  one-half  the  pro 
duct  in  the  shape  of  freights  and  commissions  the  husbandman 
will  be  impoverished.  If  the  farmers,  the  tillers  of  the  soil,  do 
not  receive  a  fair  remuneration  for  their  work,  all  other  indus 
trial  interests  will  suffer  with  them  ;  anything  that  tends  to  de 
prive  the  producer  of  the  value  of  his  product,  tends  to  the  im 
poverishment  of  the  whole  country.  Any  system  of  laws,  regu 
lations,  by  government,  or  combinations  of  men,  or  corpora 
tions,  that  are  oppressive  to  the  producer,  oppress  the  whole 
people.  It  matters  not  whether  these  oppressions  are  in  taxes, 
tariffs,  or  charges  for  transportation  of  the  farm  product ;  no 
matter  in  what  shape  it  comes,  the  result  is  the  same.  The 
great  oppression  now  being  practiced  upon  the  people  is  in 
the  enormous  charges  made  by  railroad  companies  for  carrying 
freight.  The  charters,  grants,  subsidies,  and  privileges  given 
to  these  companies  have  enabled  them  to  organize  a  powerful 
monopoly,  through  which  they  demand  and  receive  for  trans 
porting  meats,  grains,  and  other  farm  products  from  the  west  to 
the  eastern  markets,  at  least  one -half  the  value  thereof.  The 
charges  of  these  monopolies  are  arbitrary,  and  often  fixed  by 


TRANSPORTATION   AND    STORAGE.  131 


the  value  of  the  different  kinds  of  grain  carried  by  them.  For 
instance,  they  charge  one-third  more  per  ton  for  carrying  wheat 
from  the  west  to  the  east  than  for  corn  and  oats;  it  being  worth 
more  in  market,  they  ask  a  larger  dividend  from  it.  It  can  be 
carried  as  cheaply  as  oats  or  corn,  but,  because  of  its  value, 
will  bear  a  greater  charge,  and  still  leave  one-half  of  its  value 
for  the  producer.  There  is  no  good  reason  why  a  railroad 
company  should  charge  thirty  cents  per  hundred  for  carrying 
wheat  from  Muscatine  (Iowa)  to  Chicago,  when  it  charges  but 
twenty  cents  for  carrying  oats  and  corn  over  the  same  road, 
the  same  distance.  Yet  such  is  the  fact.  Those  who  are  in 
the  interest  of  these  monopolists  talk  about  cheap  freights ; 
they  argue  that  railroads  can  transport  freights  much  cheaper 
than  it  can  be  done  over  ordinary  highways.  Let  us  turn  again 
to  the  Railroad  Manual,  and  see  how  the  matter  is  treated. 
Says  the  author:  "The  cost  of  transporting  Indian  corn  and 
wheat  over  ordinary  highways  will  equal  twenty  cents  per  ton 
per  mile.  At  such  a  rate,  the  former  will  bear  transportation 
only  125  miles  to  a  market  where  its  value  is  equal  to  seventy- 
five  cents  per  bushel ;  the  latter  only  250  miles  when  its  value 
is  $1.50  per  bushel.  'With  such  highways  only,  our  most  val 
uable  cereals  will  have  no  commercial  value  outside  of  a. circle 
having  a  radii  of  125  miles  and  250  miles,  respectively.  Upon 
a  railroad  the  cost  of  transportation  equals  one  and  one-fourth 
cents  per  ton  per  mile.  With  such  a  work,  consequently,  the 
circle  within  which  corn  and  wheat,  at  the  price  named,  will 
have  a  marketable  value,  will  be  drawn  upon  a  radii  of  1 ,600 
and  3,200  miles  respectively.  The  arc  of  a  circle  with  a  radius 
of  125  miles  is  49,087  square  miles;  that  of  a  circle  drawn  up 
on  a  radius  of  1,600  miles  is  about  160  times  greater,  or  8,042,- 
406  square  miles.  Such  a  difference,  enormous  as  it  is,  only 
measures  the  value  of  the  new  agencies  employed  in  transpor 
tation,  and  the  results  achieved  compared  with  the  old." 

Here  the  fact  is  acknowledged  that  freights  can  be  trans 
ported  over  railroads  for  one  and  one-fourth  cents  per  ton  per 
mile.  At  this  rate,  a  ton  of  freight  transported  from  Musca 
tine,  Iowa,  to  Chicago,  would  cost  less  than  $2.50.  This  is 
what  the  advocates  of  aid  to  railroad  companies  publish  to  the 
world  as  a  fact,  and  from  it  deduce  the  argument  in  favor  of 


132  MONOPOLIES    AND   THE    PEOPLE. 

increased  facilities  for  their  construction,  with  greater  privi 
leges  to  be  granted  to  the  companies  constructing  them.  The 
same  rate  of  charges  for  transportation  from  the  state  of  Iowa 
to  the  city  of  New  York  would  not  amount  to  more  than  from 
twelve  to  fifteen  dollars  per  ton,  and  would  allow  the  producer 
a  fair  price  for  his  product.  But  while  it  is  admitted  that  the 
above  stated  amount  will  compensate  the  railroads  for  trans 
porting  freights,  the  amounts  actually  charged  range  from 
twenty-five  to  fifty  dollars  per  ton  from  Iowa  to  Chicago,  with 
a  proportionate  increase  to  New  York  and  other  eastern  cities. 
Where  commerce  is  open  to  competition,  a  fair  remunerative 
price  for  carrying  freights  is  all  that  is  demanded  or  paid.  If 
the  railroads  of  the  country  were  not  owned  and  controlled  by 
the  same  combinations ;  if  they  in  any  degree  answered  the 
ends  anticipated  by  the  public  when  their  charters  were  granted 
and  privileges  were  bestowed  upon  the  companies  constructing 
them,  these  excessive  charges  would  not  be  made  or  paid. 

We  have  attempted  to  show  that  all  the  railroads  in  the 
country  are  owned,  controlled,  and  operated  in  the  interest  of 
eastern  capitalists,  with  their  headquarters  in  New  York  or 
Boston ;  and  that  the  only  interest  these  capitalists  have  in  the 
producer  is  to  extort  from  him  all  they  can  get,  even  at  the 
risk  of  ruining  the  whole  country.  These  monopolists,  taking 
advantage  of  the  great  privileges  granted  them,  and  of  the 
necessities  of  the  agricultural  and  producing  classes,  have  com 
bined,  and  defying  all  competition,  as  well  as  the  legal  restric 
tions  sought  to  be  ^placed  upon  them,  are  now,  and  for  some 
time  past  have  been,  charging  such  unjust  rates  for  transporta 
tion  as  to  render  the  farm  products  of  the  west  of  little  or  no 
value.  Corn,  worth  from  sixty  to  seventy  cents  in  New  York, 
is  worth  only  from  fifteen  to  twenty-five  in  Iowa — two-thirds 
of  its  eastern  value  being  absorbed  in  charges  for  transpor 
tation,  storage,  &c.  Wheat,  worth  from  $1.50  to  $2.00  in  New 
York,  is  worth  but  from  ninety  cents  to  $1.25  in  Iowa,  the 
difference  being  absorbed  in  charges  for  transportation,  stor 
age,  commissions,  and  in  passing  it  through  elevators.  It  will 
be  seen  that  these  monopolists  who  have  combined  for  that 
purpose  are  systematically  robbing  the  farmer  of  about  one- 
half  of  his  crop.  After  he  has  labored  diligently  during  the 


TRANSPORTATION   AND    STORAGE.  133 

season,  and  harvested  his  crops  and  prepared  them  for  market, 
because  of  the  privileges  granted  to  these  monopolists  he  must 
divide  with  them,  giving  them  one-half,  or  let  it  go  to  waste, 
and  suffer  his  family  to  want  for  the  necessaries  of  life.  The 
combination  against  him  is  so  perfect  he  is  without  remedy. 
All  other  means  of  transportation  have  been  superseded  by 
railroads,  and  he  is  powerless  to  resist.  The  banditti  who  raid 
upon  the  country,  and  levy  tribute  upon  the  inhabitants  by 
force,  are  no  greater  robbers  or  oppressors  than  these  monopo 
lists.  Indeed  the  wrongs  practiced  by  the  former  are  less  to 
be  dreaded  than  those  practiced  by  the  latter.  The  people, 
supported  by  natural  and  common  law,  as  well  as  by  statutes, 
can  rid  the  country  of  the  bandit ;  but  the  monopolist  has  be 
come  so  powerful  that  he  defies  the  people,  moulds  the  statutes 
and  decisions  of  courts  to  suit  himself,  and  compels  the  whole 
country  to  submit  to  his  extortions.  No  one  would  wish  those 
engaged  in  transporting  freights  from  the  west  to  the  east  to 
lose  money  in  the  business.  On  the  contrary,  the  people  desire 
that  railroad  carriers  should  receive  a  fair  and  liberal  compen 
sation  in  their  business,  and  upon  the  capital  invested.  But 
when  it  costs  but  $30,000  per  mile  to  construct  and  stock  the 
railroads,  and  when  for  the  purpose  of  illegitimate  gain  the 
persons  owning  and  controlling  them  water  the  stock,  and  add 
to  the  actual  cost  fictitious  and  imaginary  items,  that  it  may 
appear  that  these  roads  have  cost  fifty  or  sixty  thousand  dollars 
per  mile,  then  issue  to  themselves  or  their  agents  bonds  to 
meet  these  fictitious  amounts,  and  annually  pay  to  themselves 
the  interest  on  these  bonds,  and  to  increase  the  value  of  these 
bonds  declare  dividends  upon  the  whole  stock,  it  will  readily 
be  seen  why  the  producer  does  complain  of  the  high  rates 
now  charged  for  transporting  his  products  to  market.  These 
companies  make  it  impossible  to  do  an  honest  business  and 
show  dividends,  or  ever  pay  the  interest  upon  the  bonds  they 
have  issued.  If  it  be  true  that  the  charges  for  freights  cannot 
be  reduced  on  railroads,  two  things  are  demoi:strated:  First, 
that  the  published  statements  of  the  costs  of  carrying  upon 
railroads  are  untrue ;  and  second,  that  railroads  have  entirely 
failed  to  supply  the  necessities  of  the  country.  If  we  are  to 
depend  upon  railroads  to  carry  the  agricultural  products  of  the 


134  MONOPOLIES  AND  THE  PEOPLE. 

country  to  the  seaboard,  all  hope  of  competing  with  other 
countries  in  European  markets  is  at  an  end.  If  the  cost  of 
carrying  a  bushel  of  wheat  from  Iowa  to  New  York  is  to  re 
main  as  at  present,  one  of  two  alternatives  is  presented.  Either 
the  producer  must  sell  at  ruinous  rates,  or  a  home  market 
must  be  found  for  his  crop  ;  for  the  large  amount  charged  for 
carrying  it  to  the  coast,  added  to  the  ocean  freight,  destroys  all 
hope  of  a  foreign  market,  save  in  times  of  failure  of  crops  else 
where.  We  now  complain  of  our  lack  of  shipping  upon  the 
ocean,  and  of  the  fact  that  the  balance  of  trade  is  against  us. 
With  our  large  annual  product  of  cereals,  meats,  cotton,  and 
yield  of  precious  metals,  the  balance  of  .trade  is  in  favor  of 
England  ;  and  American  shipping,  once  the  equal  of  England's, 
is  now  classed  with  only  third  and  fourth  rate  nations.  One  of 
the  chief  causes  of  this  deplorable  state  of  affairs  is  the  abso 
lute  control  obtained  by  these  petted  monopolists  over  our  in 
land  commerce,  and  their  tyrannical  extortions  in  rates  for 
transportation. 

We  have  spoken  of  the  rates  of  charges  from  the  we<t  to  the 
east.  We  need  not  go  into  details  in  this  matter,  for  every 
farmer  knows  from  experience  what  proportion  of  his  crop 
railroads  demand  as  their  share.  If  he  does  not,  let  him  look 
at  his  crib  of  corn,  worth  in  New  York  from  seventy-five  cents 
to  one  dollar  per  bushel,  and  in  Iowa  from  fifteen  to  twenty 
cents.  Three-fourths  of  his  crop  is  what  these  corporations, 
these  great  blessings  to  the  country,  as  they  claim  to  be,  demand 
of  him  for  carrying  his  one-fourth  to  market,  provided  he  will, 
at  his  own  proper  cost,  load  his  whole  crop  at  the  place  of 
shipment,  and  unload  it  when  it  reaches  its  destination ;  or, 
what  is  worse  for  him,  permit  it  to  go  into  the  company's 
storehouse.  While  this  state  of  things  lasts,  it  is  not  a  ques 
tion  as  to  how  much  the  producer  is  increasing  in  wealth,  but 
how  long  will  he  be  able  to  pay  his  taxes  and  keep  his  family 
from  starving  ?  If  he  is  in  debt,  he  is  without  hope  of  paying. 
No  king,  emperor,  or  despotic  sultan,  would  dare  to  extort 
from  his  subjects  three-fourths  of  the  productions  of  their  toil; 
yet  this  oligarchy,  composed  of  men  who,  from  long  practice, 
have  come  to  look  upon  the  people  as  their  vassals,  and  the 
fruits  of  their  labor  as  lawful  spoils,  demand  and  receive  as 


TRANSPORTATION    AND    STORAGE.  135 

their  toll  from  one-half  to  three-fourths  of  the  entire  farm 
products  of  the  country.  The  consolidation  is  now  so  perfect, 
that  these  railroad  kings  can  dictate  to  the  people  how  much 
they  shall  receive  for  their  products,  and  how  much  they  must 
pay  for  transporting  it  to  market.  Any  one  of  the  railroad 
kings  of  New  York,  by  a  telegraphic  dispatch  to  the  west,  can 
depress  the  price  of  grain  one,  five,  or  ten,  cents  per  bushel. 
The  order  is  made  at  headquarters,  and  in  one  hour  from  the 
time  it  is  made  the  farmer  in  the  west  who  is  about  to  sell  his 
one  thousand  dollars'  worth  of  wheat  must  take  nine  hundred 
dollars  for  it,  because  this  railroad  king  has  sent  word  west 
that  he  must  have  another  one  hundred  dollars  added  to  the 
already  enormous  charges  for  transportation.  Unless  this 
combination  can  be  broken  up  and  destroyed,  and  they  who 
own,  manage,  and  control  the  carrying  trade  of  the  country 
forced  to  act  honestly,  there  is  no  prosperous  future  for  the 
laboring  and  producing  portion  of  the  people ;  they  must  re 
main  bond-servants  and  vassals  of  this  railroad  oligarchy  now 
controlling  the  country. 

Another  evil  resulting  from  this  railroad  system,  directly 
affecting  the  producer,  is  the  elevator  and  warehouse  system, 
put  in  operation,  supported  by,  and  prosecuted  in  the  interest 
of,  this  monopoly.  As  a  necessity  in  shipping  and  handling 
grain  and  other  farm  products,  there  must  be  at  shipping 
points,  as  well  as  at  the  great  grain  depots,  warehouses,  store 
houses,  and  elevators.  If  these  were  owned  and 'controlled  by 
individuals,  unrestricted  by  railroad  companies,  they  would  be 
of  great  benefit  to  the  producer ;  but  such  is  not  the  fact.  Go 
to  any  way-station  on  the  roads,  or  to  any  of  the  more  promi 
nent  points,  as  well  as  to  the  great  grain  depots,  and  you  will 
find  an  arbitrary  and  oppressive  rule  adopted,  which  demands 
of  the  producer  a  further  dividend  from  his  products.  At  un 
important  points  and  way-stations,  the  warehouses  and  eleva 
tors  are  built  upon  the  company's  depot  grounds,  and,  if  not 
owned  by  the  company,  are  built  under  an  agreement  that  there 
shall  be  a  division  of  the  receipts ;  and  in  order  to  make  it 
mutual,  the  elevator  company,  or  warehouseman  is  to  charge 
certain  rates  on  all  grain  passing  through  their  hands ;  and 
the  railroad  company  is  to  receive  on  board  their  cars  no  grain 


136  MONOPOLIES    AND    THE    PEOPLE. 

that  has  not  paid  its  duty  to  the  elevator  or  storehouse. 
Whether  it  is  stored  or  not,  whether  it  passes  through  the  ele 
vator  or  not,  this  arbitrary  toll  or  levy  must  be  paid  before  it 
can  be  shipped.  If  the  farmer  deliver  it  directly  on  board  the 
care  of  the  company,  he  must  pay  these  charges  the  same  as 
though  he  had  delivered  it  to  the  warehouseman.  He  cannot 
avoid  this  extortion,  for  the  only  possible  way  he  has  to  get 
his  grain  to  market  is  to  ship  it  over  the  road,  and  this  he  can 
not  do  unless  he  pays  this  charge.  But  by  far  the  greatest 
imposition  is  practiced  at  the  great  grain  depots  at  Chicago, 
New  York,  and  other  cities.  The  immense  daily  receipts  at 
these  great  depots  demand  immense  warehouse  and  elevator 
facilities.  Large  numbers  of  elevators  and  warehouses  were 
provided  and  used — formerly  by  individuals ;  and  while  ware 
housemen  dealt  individually  with  the  public,  there  was  but 
little  abuse ;  competition  was  sufficient  to  insure  reasonable 
charges.  The  owner  of  grain,  upon  its  arrival  at  its  destina 
tion,  could  avail  himself  of  any  competition  among  warehouse 
men,  and  select  such  as  his  judgment  approved  or  his  interest 
prompted. 

But  a  different  rule  now  obtains.  These  railroads  do  not  stop 
halfway.  Their  combination  for  carrying  the  product  of  the 
country  is  perfect ;  but  another  combination  will  afford  them 
an  opportunity  for  extorting  from  the  producer  an  additional 
portion  of  his  crop  in  the  shape  of  storage.  To  effect  this  ob 
ject,  the  different  warehouse  companies  in  the  principal  grain 
marts  have  consolidated  or  "pooled"  all  their  interests,  and  in 
combination  with  the  railroad  companies  have  pursued,  and 
are  pursuing,  a  course  of  extortion  which  is  oppressive  upon 
the  producer.  When  his  grain  reaches  its  destination,  it  must 
go  into  a  warehouse  ;  he  is  in  a  worse  situation  now  than  when 
he  shipped  it ;  then  he  had  the  option  to  keep  it,  or  submit  to 
the  first  levy  in  favor  of  the  warehouseman ;  but  he  is  now 
entirely  helpless  in  the  hands  of  the  ring  formed  to  rob  him. 
Without  asking  his  consent  his  grain  is  taken  to  such  ware 
house  as  the  railroad  agent  directs ;  it  is  seized  by  the  ware 
housemen  and  stored  at  such  ruinous  rates  as  to  compel  him  to 
sell  at  once,  or  have  the  small  portion  of  the  crop  which  he 
sowed  and  harvested,  and  which  thus  far  the  railroad  combi- 


TRANSPORTATION    AND    STORAGE.  137 

nation  has  graciously  allowed  him  to  retain,  absorbed  by  ele 
vator  and  warehouse  charges.  He  is  obliged  to  use  all  these 
agencies  or  let  the  crop  go  to  waste  on  his  hands ;  and  these 
agencies  are  all  owned  and  controlled  by  this  vast,  this  gigan 
tic  corporate  power,  created,  enriched,  and  protected  by  state 
and  national  legislation,  and  constantly  guarded  by  the  decis 
ions  of  the  courts,  state  and  national.  Indeed,  the  old  despotic 
maxim,  "  The  king  can  do  no  wrong/'  that  his  acts  cannot  be 
questioned,  seems  to  have  descended  to  these  monopolies. 
They  are  protected  by  government,  and,  as  the  case  now 
stands,  their  servants,  the  people,  must  be  content,  because  all 
hope  of  relief  from  efficient  action  on  the  part  of  either  the 
legislative  or  judicial  departments  of  the  government  is  denied 
them. 


17 


CHAPTEE  XV. 

A  NEW  AND  FALSE  PRINCIPLE  IN  HYDRAULICS — WATERED    STOCK  — 
ITS    UNLAWFUL    PROFITS    THE    SOURCE    OF    EXTORTIONATE 


WE  have  attempted  to  show  some  of  the  oppressions  of 
the  present  railroad  system  upon  the  agricultural  in 
terests  of  the  country,  and,  at  the  close  of  our  last 
chapter,  were  treating  of  freights,  warehouse  charges,  &c. 
Closely  connected  with  these  latter  charges  is  another  abusive 
and  fraudulent  practice,  which  threatens  not  only  to  still  fur 
ther  oppress  the  people,  but  also  to  more  closely  combine  the 
power  now  so  rapidly  and  surely  destroying  our  republic.  I 
refer  to  what  is  known  as  "Dispatch  Companies."  To  fully 
understand  the  object  and  effect  of  these  companies  it  will  be 
necessary  to  look  a  little  further  into  the  management  of  rail 
roads,  and  the  methods  adopted  in  their  balance  sheets  for 
showing  the  cost  of  their  construction,  the  amounts  of  paid- 
up  capital,  and  their  total  indebtedness.  These  balance  sheets 
do  not  present  the  truth  in  any  instance,  and  have  not  that 
purpose,  being  only  an  exhibit  that  will  apparently  justity  the 
many  extortions  and  deceptions  practiced  by  these  corpora 
tions.  The  actual  cost  of  constructing  and  stocking  the  roads 
is  not  given ;  instead,  we  have  the  cost  as  represented  by  the 
stock  and  bonds  issued  and  watered.  For  a  clear  understand 
ing  of  this  book-keeping,  let  us  examine  the  cost  of  some  of 
the  roads  as  the  same  is  given  to  the  public,  and  compare  it 
with  the  actual  cost  as  shown  by  other  evidence.  The  "  Cen 
tral  Pacific  "  will  do  for  one  illustration. 

The  Central  Pacific  is  eight  hundred  and  eighty-one  miles 
in  length.  The  cost  of  the  road  as  given  is  $120,432,717,  or 
$136,7  00  per  mile.  The  actual  cost  per  mile,  taking  the  whole 


WATERED    STOCK.  139 

length  of  the  road  into  consideration,  was  less  than  one-half 
the  amount  reported.  This  information  we  get  through  reli 
able  channels,  and  is  undoubtedly  correct.  The  evidence  in 
duces  the  belief  that  the  cost  was  less  than  $50,000  per  mile, 
and  less  than  $50,000,000  for  the  whole  road.  The  company 
report  a  capital  stock  of  $54,283,190,  and  a  funded  debt  of 
$82,208,000.  They  also  report  the  liabilities  of  the  road  at 
$136,491,190,  being  more  than  $80,000,000  above  the  actual 
cost,  and  $16,000,000  more  than  the  reported  cost.  The  stock 
of  this  company  was  watered  to  so  great  an  extent,  that  to  pay 
the  interest  on  the  funded  debt,  and  declare  a  dividend  on  the 
stock,  and  pay  operating  expenses,  and  other  contingencies, 
the  road  must  earn  at  least  fifty  per  cent  per  annum.  Or  to 
put  it  in  plain  language,  the  company  must  defraud  the  pub 
lic  in  unjust  and  extortionate  charges. 

The  "  Sioux  City  &  Pacific  "  is  the  pet  road  of  Massachu 
setts  and  Iowa  congressmen.  The  cost  of  this  road  per  mile, 
as  shown  by  the  report  of  the  company,  is  $34,547.  This  cost 
is  represented  by  paid-up  capital — $2,067,600,  and  first  mort 
gage  bonds  —  $1,629,000.  The  road  is  one  hundred  and  seven 
miles  long.  The  actual  cost  of  this  road  was  less  than  $30,000 
per  mile.*  Aside  from  these  government  bonds,  the  reported 
cost  of  the  road  shows  that  the  stock  has  been  watered. 

The  Chicago,  Rock  Island,  &  Pacific  railroad  company  has, 
fron  Chicago  to  Davenport,  one  hundred  and  eighty-four  miles 
of  road,  and  in  Iowa  three  hundred  and  sixty  miles,  making 
five  hundred  and  forty-four  miles  in  all  The  total  cost  as  re 
ported,  is  $28,496,999,  or  the  sum  of  $52,384  per  mile.  The 
actual  cost  of  the  Illinois  portion,  as  shown  from  official 
reports,  did  not  amount  to  $30,000  per  mile,  and  the  Iowa  exten 
sion  cost  still  less,  but  including  the  bridge  at  Davenport,  the 
cost  will  approximate  to  $30,000  per  mile,  making  the  total 
actual  cost  $15,320,000,  showing  that  the  stock  of  this  road 
has  been  watered  to  the  amount  of  $13,000,000.  The  Iowa 
portion  of  this  road  received  a  grant  of  five  hundred  and  fifty 
thousand  acres  of  land,  and  aid  by  county  and  city  subscrip- 


*  NOTE.— This  company  received  $16,000  per  mile,  government  subsidy  bonds,  amounting 
in  the  aggregate  to  81,712,000,  which  does  not  appear  in  the  report. 


140  MONOPOLIES   AND   THE    PEOPLE. 

tions  amounting  at  least  to  $500,000,  that  do  not  appear  in  the 
published  statement. 

The  Iowa  Falls  &  Sioux  City  road  is  under  the  special  care 
of  congressmen.  It  has  one  hundred  and  eighty-four  miles  of 
road,  but  no  rolling  stock.  The  total  cost  as  given  is  $7,585,- 
000,  or  $41,222  per  mile,  while  the  actual  cost  was  about 
$31,000.  The  stock  was  watered  to  the  amount  of  $1,800,000, 
and  this,  too,  after  having  received  a  grant  of  land  to  the 
amount  of  one  million  two  hundred  and  twenty-six  thousand 
four  hundred  and  six  acres. 

We  might  continue  this  list,  but  think  we  have  referred  to 
a  sufficient  number  for  our  purpose.  It  will  be  seen,  and  is 
now  pretty  well  understood,  that  the  cost  of  railroads  as  re 
ported  by  the  companies  is  not  their  actual  cost,  but  includes 
large  amounts  that  are  pure  fictions — an  increase  of  the  capi 
tal  stock,  no  part  of  which  is  used  or  needed  in  the  construc 
tion  of  the  road,  stock  that  is  not  even  paid  up,  but  is  distrib 
uted  among  stockholders  in  proportion  to  the  amount  of  bona 
fide,  stock  each  one  holds  in  the  company.  The  capital  stock 
of  the  company,  and  bonds  issued  by  it,  are  supposed  to  rep 
resent  the  cost  of  the  company's  road,  rolling  stock,  &c.  But 
few  roads  in  the  country  fail  to  earn  large  dividends  on  this 
actual  cost,  and  but  for  the  custom  of  watering  stock,  would 
show  fair  profits  after  running  expenses,  repairs,  &c.,  are  paid. 
If  these  corporations  were  prohibited  by  statute  from  increas 
ing  their  capital  stock  above  the  actual  cost  of  their  roads,  less 
money  would  be  required  for  transportation  of  freights,  and 
there  would  be  no  need  of  resorting  to  dispatch  companies,  or 
any  other  ring  combinations  for  the  purpose  of  extorting  un 
just  amounts  for  transportation.  But  these  combinations  do 
not  construct  roads,  simply  for  the  purpose  of  operating  them ; 
this  is  but  a  secondary  consideration.  The  main  object  is  to 
speculate  in  stock  and  bonds. 

Wall  street  being  the  grand  center  for  this  kind  of  specula 
tion,  the  company,  in  order  to  profit  by  sale  of  its  bonds,  must 
make  a  showing  in  this  grand  mart  of  receipts  sufficient  to 
command  public  attention,  the  rule  being  that  stocks  and  bonds 
appreciate  in  value  in  market  in  proportion  to  the  dividends 
declared  upon  their  earnings.  They  who  control  these  roads 


WATERED    STOCK.  141 

have  two  objects  in  view :  first,  to  add  to  their  capital  stock ; 
and  second,  to  make  dividends  upon  such  increase  of  stock. 
If  a  line  of  road  cost  $2,000,000,  and  the  company  owning  it 
can  by  any  means  make  it  pay  dividends  on  three  or  four  mil 
lions,  they  can  issue  to  themselves  stock  representing  this  in 
crease.  Having  thus  increased  their  stock,  under  the  pretense 
that  they  wish  to  construct  more  road,  or  improve  or  repair 
what  they  already  have,  they  issue  their  bonds  to  the  amount 
of  the  increased  stock  (sometimes  to  an  amount  equal  to  more 
than  their  entire  capital)  and  put  them  upon  the  market.  The 
first  object  is  to  get  dividends  upon  whatever  stock  they  have 
paid  up  (if  any  is  paid  up),  and  next  to  make  their  roads  earn 
enough  to  pay  the  interest  on  their  bonds,  and  then,  if  possi 
ble,  to  force  the  earnings  of  their  roads  to  a  point  where  divi 
dends  can  be  paid  on  the  increase  of  stock.  Having  increased 
their  capital  stock,  and  issued  and  sold  their  bonds,  they  are  in 
no  haste  to  add  to,  or  improve  or  repair,  their  roads ;  for  they 
have  already  consummated  the  object  in  view,  to-wit :  made  in 
cash  the  market  value  of  their  bonds.  This  same  operation  is 
repeated  as  often  as  their  capital  stock  will  bear  reducing,  and 
in  some  instances  it  has  been  repeated  until  the  stocks  and 
bonds  became  almost  worthless.  This  species  of  speculation 
does  not  add  one  dollar  to  the  wealth  of  the  country,  nor  aid 
commerce.  It  only  enriches  that  class  of  speculators  who  prey 
upon  the  public. 

We  have  shown  that  one  and  one-fourth  cents  per  mile  per 
ton  will  compensate  for  transporting  freights  over  railroads, 
provided  the  business  is  conducted  fairly  and  honestly,  and  we 
can  now  begin  to  understand  why  such  enormous  rates  are 
charged.  The  roads  must  earn  enough  to  pay  the  interest  up 
on  all  the  bonds  sold  and  upon  the  capital  stock  issued  by  these 
companies.  The  people,  the  producers,  are  taxed  for  this  pur 
pose.  One-half  of  the  products  of  every  farm  in  the  west  goes 
into  the  pockets  of  these  Wall  street  speculators,  and  the  rates 
for  transportation  are  increased  in  the  same  proportion  that 
these  stocks  and  bonds  are  increased.  When  more  money  is 
demanded  in  Wall  street,  telegrams  are  sent  throughout  the 
country  by  these  railroad  kings  to  their  agents  and  employes 
to  advance  the  rates  on  transportation.  This  reduces  the  price 


142 


MONOPOLIES   AND    THE    PEOPLE. 


of  the  farm  products,  and  puts  the  earnings  of  the  farmer  into 
the  pockets  of  the  railroad  monopolist,  and  the  stock  and  bond 
gambler  in  Wall  street. 

It  would  look  as  though  the  combinations  of  this  oligarchy 
were  perfect;  that  the  system  of  extorting  from  the  people  and 
robbing  the  producers  could  not  be  improved,  and  that  these 
most  unscrupulous  oppressors  ought  to  be  satisfied.     Such  is 
not  the  case.     Either  because  they  wish  to  have  fewer  num 
bers  with  whom  to  divide  the  spoils,  or  because  they  have  re 
duced  the  value  of  their  stocks  and  bonds  until  it  is  necessary 
that  their  roadt,  pass  under  other  management,  or  because  they 
must  have  still  higher  rates  for  transportation,  of  late  a  new 
combination  for  transportation  has  been  formed,  called  Dis 
patch  agencies  or  companies  —  a  kind  of  "Credit  Mobilier" 
arrangement.     These  dispatch  companies  are  comparatively 
new  in  the  west,  and  we  know  but  little  of  their  organization 
save  that  it  costs  still  more  to  ship  with  them  than  with  rail 
road  companies.     These  dispatch  agencies  are  not  formed  to 
compete   with   railroad    companies   in   the   transportation   of 
freights,  nor  are  they,  in  any  measure,  rivals  or  opponents  of 
railroad  companies.     In  the  nature  of  things  there  must  be 
perfect  accord  between  these  two  corporations,  for  the  railroad 
companies  could  and  would  at  once  destroy  the  dispatch  busi 
ness,  if  the  same  in  any  manner  conflicted  with  the  interests 
of  railroad  managers.     The  dispatch  companies  depend  en 
tirely  upon  the  railroad  companies  for  cars,  locomotives,  and 
railroads  for  carrying  their  freight.     Enough  is  known  of  rail 
road  management  to  satisfy  the  most  skeptical,  that  the  organ 
ization  of  dispatch  companies  is  for  purposes  other  than  the 
more  expeditious  transportation  of  freight.     These  dispatch 
companies  are  composed  mainly  of  railroad  directors  and  super 
intendents,  with  a  few  figure  heads  to  represent  the  outside 
world.     After  the  formation  of  the  dispatch  companies,  con 
tracts  for  the  use  of  .cars,  locomotives,  and  roads  are  made  upon 
the  same  principle  and  for  the  same  objects  as  in  the  case  of 
the  Union  Pacific  railroad  company  and  the  Credit  Mo-bilier 
company.     The  directors  of  the  railway  company,  represent 
ing  the  company,  contract  with  themselves  as  a  dispatch  com 
pany,  to  supply  themselves  cars,  locomotives,  and  roads  for  the 


WATERED    STOCK.  143 

prosecution  of  the  business  of  the  dispatch  company,  and  for 
a  certain  consideration  agree  to  pay  themselves,  as  directors  of 
the  railway  company,  for  what  is  so  leased  to  themselves  as  a 
dispatch  company:  and  then  in  order  to  promote  the  business 
interests  of  the  dispatch  company,  and  secure  to  themselves  as 
its  directors  higher  rates  for  transportation  of  freight,  they 
make  it  a  point  at  all  times  to  give  the  preference  to  the  said 
dispatch  company.  As  a  result  of  this  arrangement  the  dis 
patch  companies  monopolize  the  principal  part  of  the  business. 
They  are  in  appearance  opposition  lines  to  the  roads  on  whose 
tracks  they  are  carried,  and  are  really  so,  when  the  interest  of 
the  railroad  stockholders  not  concerned  in  the  dispatch  com 
panies  are  considered.  These  stockholders  get  their  dividends 
upon  their  capital  stock  and  their  share  of  "  watered  stock  " 
and  bonds,  but  do  not  participate  in  the  profits  of  the  dispatch 
business. 

Like  the  Credit  Mobilier,  it  pays  large  dividends  which  it 
extorts  from  the  people,  charging  even  higher  rates  than  the 
railroad  companies ;  but  it  only  divides  among  its  members, 
and  not  with  the  stockholders  of  the  railroad  company  whose 
track  it  uses.  The  interest  of  these  stockholders  is  not  con 
sidered.  They  have  built  and  equipped  the  road,  and  selected 
their  directors  and  managers ;  but  these  managers  and  direct 
ors  turn  the  road  over  to  a  hostile  company,  composed  of  them 
selves  and  select  friends.  To  promote  the  business  of  the  dis 
patch  companies,  their  trains  are  transported  from  one  end  of 
the  railroad  to  the  other  in  less  than  half  the  time  required  to 
transport  a  train  of  freight  cars  belonging  to  the  road.  The 
effect  of  this  course  of  procedure  is  obvious.  Shippers,  find 
ing  that  these  railroad  managers  discriminate  against  the  cars 
belonging  to  the  road  proper,  and  that  they  grant  extraordinary 
favors  and  facilities  to  the  opposition  lines,  quit  patronizing 
the  former  and  do  business  with  the  dispatch  companies.  The 
result  is  that  the  dispatch  companies  now  control  the  freight 
business,  and  the  railroads  have,  as  a  rule,  quit  providing 
themselves  with  freight  cars.  When  applied  to  for  cars,  the 
answer  is,  "  We  have  none,"  while  at  the  same  time  the  side 
tracks  are  filled  with  freight  cars  belonging  to  these  dispatch 
companies,  demanding  much  higher  rates  than  the  regular 


144  MONOPOLIES   AND   THE    PEOPLE. 

charges.  At  the  first  glance  we  fail  to  understand  why  a 
course  so  suicidal  to  the  best  interests  of  the  railroad  company 
is  pursued  by  its  directors  and  managers,  nor  can  we  readily 
comprehend  why  they  permit  these  dispatch  companies  to  mo 
nopolize  their  tracks  and  destroy  the  business  of  their  roads. 
We  think  we  can  solve  the  problem,  These  managers  of  the 
railroads,  and  such  stockholders  as  are  admitted  to  a  participa 
tion  in  the  conspiracy,  are  the  proprietors  and  incorporators  of 
the  dispatch  companies.  After  payment  of  the  running  and 
other  expenses  of  the  road,  and  their  own  salaries  (fixed  by 
themselves)  the  dividends  on  their  railroad  stock  is  small. 
Their  position  as  stockholders  in  both  the  railroad  and  dis 
patch  companies  is  the  same  as  was  that  of  the  stockholders  of 
the  Pacific  railroad  companies  and  the  Credit  Mobilier,  who 
could  well  afford  to  sacrifice  the  interests  of  the  road  and  its 
stockholders  who  had  no.  interest  in  the  Credit  Mobilier,  pro 
vided  they  received  large  dividends  from  their  Credit  Mobilier 
stock.  So,  in  organizing  the  dispatch  companies  and  giving 
them  the  preference  over  the  roads,  with  the  absolute  control 
of  the  freighting  business,  while  the  railroad  stocks  pay  no 
dividends  and  depreciate  in  value,  and  the  roads  and  rolling 
stock  are  being  worn  out,  the  dispatch  business  thrives  and 
pays  large  dividends  to  this  inside  ring  —  comparatively  small 
in  numbers — which  controls  the  road,  and  in  addition  to  prey 
ing  upon  the  public,  so  arrange  the  business  as  to  exclude 
the  stockholders  of  the  road  from  any  share  in  the  profits  of 
the  dispatch  company.  Having  oppressed  the  public  by  extor 
tionate  charges  for  transportation,  increased  the  stock  of  the 
railroad  company  to  an  amount  that  precludes  profitable  divi 
dends,  even  from  the  highest  of  tariffs,  and  issued  and  sold 
bonds  of  the  company  to  so  large  an  extent  as  to  make  it  im 
possible  to  pay  the  interest  on  them,  and  at  the  same  time  meet 
the  running  expenses  of  the  road,  including  their  own  salaries 
as  officers  and  managers,  having,  in  short,  loaded  the  railroad 
companies  with  burdens  greater  than  they  can  bear,  as  a  last 
master  stroke  of  financiering  they  organize  themselves  into 
dispatch  companies,  and  while  they  enrich  themselves  they  re 
duce  the  railroad  companies  in  which  they  are  managing  direct 
ors  to  absolute  bankruptcy.  The  stockholders  who,  confiding  in 


WATERED   STOCK.  145 

the  integrity  of  these  men,  elected  them  directors  and  mana 
gers,  are  swindled  out  of  their  legitimate  dividends,  their  stock 
becomes  worthless,  debts  accumulate  against  the  company,  loco 
motives,  tracks,  and  cars  are  worn  out  in  transporting  freights 
for  the  dispatch  company,  at  rates  ruinous  to  the  railroad  com 
pany,  and  as  a  grand  finale  the  road  passes  into  the  hands  of 
these  conspirators,  under  the  orders  or  judgments  of  courts. 
In  the  meantime  shippers  are  compelled  to  pay  double  prices 
for  freights,  because  the  railroad  companies  have  not  the  neces 
sary  facilities  for  shipping ;  all  has  passed  into  the  hands  and 
under  the  control  of  the  dispatch  companies.     By  a  mere  fic 
tion,  the  managers  of  the  road  contracting  with  themselves  as 
dispatch  companies,  a  competition  is  permitted  to  take  the  con 
trol  of  the  carrying  trade  over  the  road,  control  the  track  and 
rolling  stock,  as  well  as  the  officers  of  the  railroad  company, 
destroy  their  business  and  drive  them  into  bankruptcy.    Those 
not  in  the  secret  of  the  organization  fail  to  comprehend  its 
necessity;  why,  for  example,  a  train  of  cars  run  in  the  interest 
of  the  dispatch  companies  can  travel  at  double  the  rate  of  speed 
of  the  trains  run  in  the  interest  of  the  railroad  company,  or 
why  higher  rates  for  transportation  should  be  taxed  and  paid. 
The  only  solution  we  can  give  is,  that  it  presents  additional 
means  for  taking  from  the  producer  an  additional  portion  of 
his  product,  in  the  shape  of  charges  supposed  to  be  paid  to  a 
company  organized  for  the  purpose  of  aiding  in  the  transpor 
tation  of  freights,  but  which  is,  as  a  matter  of  fact,  a  combina 
tion  in  the  interest  of  the  managers  of  the  road  with  the  real 
purpose  of  making  personal  gain  to  themselves  at  the  sacrifice 
of  the  interests  of  the  stockholders. 

As  a  result  of  this  new  mode  of  conducting  business,  let  us 
see  how  the  price  of  freights  is  affected.  During  the  summer 
and  fall  of  1872  the  price  of  freights  by  water  from  Chicago 
to  New  York  was  $4.25  per  ton,  and  by  railroad  from  $7.00  to 
$8.00.  With  the  close  of  navigation  the  rates,  under  the  man 
agement  of  the  dispatch  companies,  advanced  to  from  $25.00 
to  $28.00  per  ton.  While  the  railroad  companies  can  carry  for 
$7.00,  the  dispatch  companies  charge  $25.00.  The  margin  for 
profit  on  the  stock  of  these  dispatch  companies  promises  to 

18 


146  MONOPOLIES   AND   THE   PEOPLE. 

equal  the  dividends  of  the  Credit  Mobilier  stock,  and  from  this 
showing  we  can  have  some  idea  of  the  robbery  being  practiced 
upon  the  people,  particularly  the  farmers.  Well  may  the  pro 
ducers  of  the  west  complain  of  these  swindling  monopolies, 
and  band  together  for  mutual  protection. 


CHAPTER  XVI. 

A  PRIVILEGED  CLASS  —  THE  MONOPOLISTS  RELIEVED  OF  THE  BURDENS 
OF  TAXATION  —  AN  OUTRAGE  UPON  REPUBLICAN  GOVERNMENT. 

yi  MOTHER  evil  resulting  from  the  railroad  system  of  the 
/  \  country  is  the  partiality  shown  railroad  companies  in  the 
-*•  •*•  matter  of  taxation.  The  constitutions  of  all  the  states 
provide  that  the  levy  of  taxes  shall  be  uniform ;  and  in  con 
templation  of  law  each  owner  of  property  subject  to  taxation 
must  bear  a  proportionate  share  of  the  taxes  levied  for  the  sup 
port  of  the  government.  Indeed,  it  is  a  part  of  the  compact 
entered  into  among  all  civilized  people,  that  each  will  contrib 
ute  a  proportionate  share  towards  defraying  the  expenses  of 
the  government  under  which  he  lives,  and  which  affords  him 
protection,  and  secures  to  him  the  enjoyment  of  his  rights  as 
a  citizen.  In  a  republic  where  all  have,  or  are  supposed  to 
have,  equal  rights,  this  contribution  to  the  support  of  the  gov 
ernment  is  a  duty  weighing  upon  all,  and  to  make  a  discrim 
ination  in  favor  of  any  man  or  class  of  men,  or  of  any  com 
panies  or  corporations,  contradicts  the  tundamental  principles 
of  republican  government,  and  recognizes  favored  or  privi 
leged  classes.  To  compel  the  property  of  individuals  to  alone 
bear  the  burdens  which  should  be  shared  by  that  of  corpora 
tions  violates  both  the  letter  and  spirit  of  the  constitution.  All 
public  burdens  should  bear  equally  upon  all  people,  associa 
tions,  and  corporations.  The  legislature  has  as  much  right  to 
say  that  the  property  of  one-half  of  the  citizens  of  a  state  shall 
pay  the  entire  expenses  of  the  government,  while  no  taxes 
shall  be  imposed  upon  the  property  of  the  other  half;  or  to 
provide  that  they  who  engage  in  particular  branches  of  busi 
ness  shall  supply  all  the  means  for  defraying  the  expenses  of 
the  government,  as  to  provide  for  the  partial  or  total  exemp 
tion  from  taxation  of  the  property  of  corporations.  Yet  as  a 


148  MONOPOLIES    AND    THE    PEOPLE. 

matter-of-fact  railroad  corporations  are  not  required  to  pay 
their  proportionate  share  of  taxes,  nor  is  their  property  sub 
jected  to  the  same  rules  of  taxation  as  that  of  individuals.  In 
almost  all  the  states  these  corporations  are  taxed  upon  their 
earnings ;  their  own  officers  keep  the  books,  and  once  in  each 
year  make  a  showing,  and  upon  this  showing  a  small  tax  is 
levied.  If  they  are  honest  and  present  a  correct  statement  of 
the  earnings  of  their  road,  the  amount  of  tax  fixed  by  the  leg 
islature  of  the  state  is  paid;  but  if  they  choose  to  suppress  the 
truth  a  less  amount  must  suffice.  Take  the  state  of  Iowa  as 
an  illustration.  Prior  to  1872  railroad  property  in  this  state 
did  not  pay  more  than  one-seventh  as  much  tax  upon  its  value 
as  +he  property  of  individuals,  and  under  the  present  law  it 
does  not  pay  more  than  one-half  as  much.  Yet  no  property 
in  the  state  has  yielded  such  large  profits  on  its  actual  cost  and 
value  as  railroad  property.  Iowa  had  in  1872,  subject  to  taxa 
tion,  3,160  miles  of  railroad.  Take  the  value  of  their  roads 
as  fixed  by  the  companies  and  reported  in  the  Railroad  Manual, 
and  the  average  per  mile  is  over,  rather  than  under,  $40,000. 
Then  for  the  purpose  of  taxation  reduce  the  valuation  to  about 
the  same  rates  as  are  fixed  upon  the  property  of  individuals, 
and  the  average  would  be  about  $18,000  per  mile.  This  would 
make  the  grand  aggregate  for  tax  purposes  $56,000,000.  Now 
if  a  two  per  cent  tax  (which  is  less  than  the  average  rate  for 
all  purposes)  was  assessed  upon  this  property,  the  revenue  to 
the  state  and  counties  would  amount  to  the  sum  of  $1,120,000. 
But  if  the  same  rule  of  taxation  were  applied  alike  to  all  prop- 
ertv  in  the  state  the  rate  demanded  of  individuals  would  be 

v 

less  than  at  present,  while  railroad  companies  would  only  be 
required  to  do  what  the  constitution  exacts  of  them,  to-wit: 
pay  their  just  proportion  of  taxes  for  the  support  of  state 
government.  Is  it  any  wonder  that  we  complain  of  high  rates 
of  taxes  when  so  large  a  portion  of  the  property  in  the  state  is 
exempt  from  taxation  ?  In  Muscatine  county  there  is  at  pres 
ent  about  eighty-five  miles  of  railroad.  At  an  assessed  value 
of  $18,000  per  mile  the  total  for  taxation  would  be  $1,530,000, 
which,  on  a  two  per  cent  tax  would  afford  a  revenue  of  $30,- 
600,  of  which,  if  divided  between  the  state  and  county  as  other 
taxes  are  divided,  there  would  be  paid  into  the  county  treasury 


A    PRIVILEGED    CLASS.  14 P 

about  $24,500,  which  would  be  a  large  increase  over  the  amount 
now  paid  to  the  county.  The  same  would  be  the  result  in  all 
the  other  counties  in  the  state  were  the  manner  of  taxing  rail 
roads  so  changed  as  to  make  no  discriminations  in  their  favor. 
The  same  kind  of  discrimination  is  made  in  most  of  the  states 
in  favor  of  the  railroads  and  against  the  people.  No  good 
reason  has  ever  been  given  for  this  kind  of  discrimination,  nor 
can  it  be  supported  or  justified  upon  principle  or  upon  consti 
tutional  grounds.  The  value  of  a  mile  of  railroad  can  be  as 
easily  ascertained  as  that  of  an  acre  of  ground,  or  of  a  house 
and  lot.  The  depot,  and  station  grounds  and  buildings  can  be 
assessed  as  readily  as  any  grounds  or  buildings.  The  value  of 
their  rolling  stock  is  always  included  by  the  companies  in  giv 
ing  the  cost  of  their  roads,  and  the  value  of  the  roads,  includ 
ing  rolling  stock,  can  be  more  easily  ascertained  by  the  assessor 
than  t>  e  value  of  many  kinds  of  personal  property,  yet  it  has 
never  been  considered  necessary  or  permissible  under  the  con 
stitution  to  discriminate  in  favor  of  individuals  or  classes  of 
individuals  when  assessing  property  for  the  purposes  of  taxa 
tion.  But  when  the  property  of  these  gigantic  corporations  is 
to  be  taxed,  when  they  are  called  upon  for  their  share  of  taxes 
to  aid  in  defraying  the  expenses  of  the  governments  that  are 
granting  them  extraordinary  and  exclusive  privileges,  they  re 
fuse  to  submit  to  the  law  which  prescribes  the  manner  of  col 
lecting  taxes  from  the  people  and  ask  special  legislative  enact 
ments  in  their  favor.  To  secure  such  enactments  they  use 
their  great  influence  in  filling  the  legislative  halls  with  their 
stockholders,  directors,  and  attorneys.  Thus  far  they  have 
generally  succeeded,  and  in  most  of  the  states  special  statutes, 
discriminating  in  their  favor,  are  now  in  force.  Because  of 
this  special  legislation  the  people  are  paying  taxes  that  should 
be  paid  by  railroad  companies,  and  in  return  for  favors  shown, 
these  companies  are  constantly  increasing  their  extortions,  and 
imposing  additional  burdens  upon  the  people. 

We  can  more  fully  realize  the  extent  of  the  unjust  burdens 
imposed  upon  the  people  by  ascertaining  the  amount  of  capi 
tal  invested  in  railroads  in  the  United  States,  and  showing  its 
relative  value  compared  with  the  taxable  property  of  the  coun 
try.  For  this  purpose  it  will  not  be  unfair  to  take  the  value 


150  MONOPOLIES    AND    THE    PEOPLE. 

of  railroad  property  as  given  by  the  different  companies  and 
published  in  the  Railroad  Manual.  The  reported  cost  of  all  but 
forty-six  roads  in  the  United  States  is  $2,070,980,285.  If  we 
add  to  this  amount  the  probable  cost  of  those  not  reported, 
among  which  is  the  Union  Pacific,  this  large  sum  will  be  swol 
len  to  nearly  $3,000,000,000.  The  taxable  property  in  the 
United  States,  reported  in  the  census  of  1870,  was  $14,178,- 
986,732.  If  this  railroad  property  was  included,  these  corpo 
rations  should  pay  about  one-fifth  of  all  the  taxes  collected  in 
the  country.  The  method  of  taxing  railroad  property  that  has 
always  obtained  in  Iowa,  and  some  of  the  other  states,  relieves 
it  of  at  least  three-fourths  of  the  taxes  justly  due  from  it,  and 
requires  the  people  to  supply  the  deficiency  created  by  this  ex 
emption.  But,  as  will  appear  from  the  census  returns,  a  small 
portion  only  of  the  vast  railroad  wealth  of  the  country  is  in 
cluded  in  the  valuation  of  property  returned ;  nor  is  it  listed 
and  returned  by  local  assessors  as  is  the  case  with  the  property 
of  individuals.  In  Iowa  the  census  returns  show  the  value  of 
the  property  in  the  state  to  be  $302,515,418.  The  value  of 
railroads  in  Iowa,  as  shown  by  the  different  companies,  is  $84,- 
067,663.  An  equal  assessment  and  levy  of  taxes  upon  all  the 
property  in  the  state  subject  to  taxation  would  require  this 
railroad  property  to  pay  over  one-fourth  of  all  the  taxes  levied 
in  the  state;  yet  as  a  matter  of  fact  not  one-twentieth  of  this 
amount  has  ever  been  collected,  unless  we  except  the  year 
1872,  when  a  small  increase  over  old  rates  was  required.  While 
all  acknowledge  the  injustice  of  this  system  of  discrimination 
in  favor  of  railroad  companies,  and  while  the  people  are  bur 
dened  with  more  than  their  just  proportion  of  taxes,  all  efforts 
to  correct  the  evil  seem  to  have  proved  abortive.  The  fact 
that  more  than  eighty-four  millions  of  dollars,  being  over  one- 
fourth  of  the  entire  wealth  of  the  state,  is  held  and  controlled 
by  corporations,  possessing  under  their  charters  special  privi 
leges,  who  have  combined  to  prevent  legislation  that  would 
require  of  them  a  contribution  of  their  just  share  for  the  sup 
port  of  the  government,  explains  the  reasons  for  these  discrim 
inations  in  the  collection  of  taxes.  The  power  of  this  railroad 
oligarchy  is  now  so  great  that  it  shapes  and  controls  all  revenue 


A    PRIVILEGED   CLASS.  151 

statutes.  In  all  cases  where  the  interests  of  the  people  and 
those  of  these  corporations  conflict,  the  corporations  acting  in 
concert,  are  triumphant,  and  the  interests  of  the  people  are 
disregarded.  Taxes  justly  due  from  the  corporations,  by  spe 
cial  legislation,  are  extorted  from  the  people,  because  this  anti- 
republican  combination,  controlling  the  wealth  of  the  country, 
demands  it. 


CHAPTER  XVII. 

THE  STRONG  GRASP  OF  CONSOLIDATED  CAPITAL  ON  AMERICAN  LEGIS 
LATION BEECHER  ON  "  REFORMATION  OR  REVOLUTION  " — 


HOWEVER  much  we  may  boast  of  our  purity,  patriotism, 
and  political  integrity,  the  history  of  the  legislation  of 
the  United  States,  both  state  and  national,  proves  that 
legislators,  like  other  men,  are  subject  to  temptation,  and  that 
they  do  not  always  successfully  resist  the  tempter.  It  is  not  a 
pleasant  truth  to  acknowledge,  that  the  acquisition  of  money 
is  the  controlling  motive  in  the  American  mind ;  yet  it  is  a 
truth.  Nor  is  it  pleasing  to  admit  that  corporations  control 
the  legislation  of  our  nation  and  state ;  but  the  fact  is  too 
patent  to  be  denied.  Nor  will  any  one  who,  without  prejudice, 
examines  the  history  of  legislation  upon  the  subject  of  rail 
roads,  deny  that  legislators  have  been  controlled  in  their  acts 
by  the  desire,  and  from  the  prospect  of  receiving  personal 
pecuniary  benefit  by  the  passage  of  acts  granting  special  favors 
to  railroad  companies.  If  the  instances  of  corrupt  legislation 
were  rare,  or  if  the  persons  who  acted  from  personal  consider 
ations,  rather  than  for  the  public  good,  were  few  in  number, 
we  would  not  feel  justified  in  devoting  time  to  the  discussion 
of  the  subject.  But  when  this  species  of  legislation  becomes 
the  rule,  and  legislation  in  favor  of  the  people  the  exception, 
as  has  been  the  case  for  years  past,  we  feel  fully  justified  in 
calling  the  reader's  attention  to  the  matter. 

If  we  were  asked  what  acts  passed  by  the  forty-second  con 
gress  were  of  benefit  to  the  people,  we  would  be  expected  to 
answer  that  the  internal  revenue  and  tariff  laws  had  been 
modified,  and  a  part  of  their  burdens  lifted  from  the  people ; 
but  nothing  else  of  benefit  to  the  public.  If,  however,  we 
were  to  look  through  the  acts  of  this  congress,  we  would  find 


GRASP    OF    CAPITAL    ON    LEGISLATION.  153 

almost  all  conceivable  acts  in  favor  of  corporations,  companies, 
and  individuals,  granting  special  privileges,  which,  in  almost 
every  instance,  might  be  characterized  a  "  congressional  job." 
Patent  right  extensions  ;  grants  to  railroad  companies  ;  for  the 
sale  of  Indian  reservations ;  amendments  to  railroad  charters, 
bridge  charters,  and  other  like  interests,  have  monopolized 
the  time  of  the  national  legislature  not  consumed  in  investi 
gating  alleged  irregularities  of  some  of  its  members.  As  a 
rule,  lobbyists  and  rings  have  shaped  and  controlled  legislation 
for  years,  and  have  constituted  themselves  one  of  the  estab 
lished  institutions  at  the  national  capital.  The  successful  lob 
byist  demands  and  receives  for  his  services  larger  pay  than  the 
salary  of  congressmen.  These  men  never  appear  at  Wash 
ington  unless  they  have  a  congressional  job  on  hand.  To  them 
the  ear  of  the  average  congressman  is  always  open.  A  meas 
ure  without  any  merit,  save  to  advance  the  interest  of  a  pat 
entee,  or  contractor,  or  a  railroad  company,  will  become  a  law, 
while  measures  of  interest  to  the  whole  people  are  suffered  to 
slumber,  and  die  at  the  close  of  the  session  from  sheer  neglect. 
It  is  known  to  congressmen  that  these  lobbyists  are  paid  to 
influence  legislation  by  the  parties  interested,  and  that  dishon 
est  and  corrupt  means  are  resorted  Jo  for  the  accomplishment 
of  the  object  they  have  undertaken  ;  that  they  are  a  species  of 
brokers  whose  business  it  is  to  beg  and  buy  congressional 
votes  for  some  pet  scheme ;  to  do  acts  which  in  former  times 
would  have  disgraced  all  parties  concerned,  but  who  are  now 
looked  upon  as  a  necessary  part  of  the  legislative  machinery. 
Of  course  those  interests  that  can  employ  the  greatest  number 
of  these  congressional  brokers,  and  wield  the  greatest  influence 
throughout  the  country,  are  in  the  best  shape  to  secure  favor 
able  legislation.  ]STo  one  interest  in  the  country,  nor  all  other 
interests  combined,  are  as  powerful  as  the  railroad  interest. 
Railroad  corporations,  by  constantly  asking  and  receiving, 
have  acquired  such  strength  as  to  control  legislation  in  all 
cases  where  their  interests  are  affected.  With  a  net-work  of 
roads  throughout  the  country  :  with  a  large  capital  at  com 
mand ;  with  an  organization  perfect  in  all  its  parts;  controlled 
by  a  few  leading  spirits  Uke  Scott,  Vanderbilt,  Gould,  Jay, 
Tracy,  and  a  dozen  others,  the  whole  strength  and  wealth  of 
19 


154  MONOPOLIES   AND   THE    PEOPLE. 

this  corporate  power  can  be  put  into  operation  at  any  moment, 
and  congressmen  are  bought  and  sold  by  it  like  any  article  of 
merchandise. 

We  have  already  shown  the  value  of  the  railroad  property 
in  the  United  States,  and  some  of  the  practices  of  companies, 
and  their  abuse  of  the  privileges  granted  them.  We  are  now 
treating  of  their  influence  upon  legislators  and  legislation,  and 
of  the  great  power  their  wealth  and  combination  secure  for 
the  purpose  of  controlling  legislation.  In  this  connection  we 
must  not  forget  that  the  vast  sums  owed  by  railroad  companies 
in  the  CJnited  States,  for  which  their  bonds  have  been  issued 
and  sold,  is  a  powerful  persuasion  for  legislation  in  their  favor. 

We  look  upon  the  national  debt  as  being  enormous,  and  are 
apt  to  complain  of  the  burdens  it  imposes;  but  great  as  it  is, 
these  railroad  corporations,  after  showing  a  paid-up  capital 
equal  to  the  cost  of  all  the  roads  in  the  country,  less  $865,357,- 
195,  show  a  bonded  indebtedness  of  $2,874,149,667,  being  two 
billions  over  and  above  the  entire  cost  of  all  the  roads  in  the 
United  States,  showing  that  the  total  amount  chargeable 
against  the  railroads  of  the  country,  exclusive  of  floating  debts, 
is  the  sum  of  $5,169,129,664.  This  vast  sum,  amounting  to 
more  than  one-third  in  value  of  the  entire  taxable  property  of 
the  nation,  is  concentrated  in  these  corporations,  whose  inter 
ests  are  at  war  with  the  people's.  Controlled  as  it  is  by  a  few 
leading  men,  who  have  their  partners,  agents,  and  servants 
everywhere,  it  is  not  strange  that  the  champions  of  these  mo 
nopolists  should  be  found  in  congress.  The  power  of  this 
great  monopoly  is  felt  in  the  nomination  and  election  of  con 
gressmen.  One-third  of  the  wealth  of  the  nation  combined 
under  the  control  of  a  few  men  is  a  dangerous  power  in  a  re 
public.  When  the  object  sought  to  be  accomplished  by  this 
power  has  been  to  take  control  of  the  government,  and  ad 
minister  all  its  departments  in  the  interest  of  anti-republican 
institutions,  to  build  up  monopolies,  and  trample  upon  the 
rights  of  the  people,  it  has  had  no  trouble  to  secure  the  num 
ber  of  congressmen  sufficient  for  its  purposes.  In  proof  of 
this  assertion  we  have  only  to  look  at  the  history  of  congress 
ional  legislation  upon  the  subject  of  railroads  as  shown  in  a  for 
mer  part  of  this  work.  We  cannot  shut  our  eyes  to  the  fact 


GRASP   OF   CAPITAL    ON    LEGISLATION  155 

that  the  consolidation  and  combination  of  wealth  and  influence 
of  railroad  companies  have  procured  the  passage  of  acts  of  con 
gress  under,  and  by  means  of  which,  these  corporations  have 
added  largely  to  their  wealth,  and  strengthened  themselves 
for  the  desperate  struggle  soon  to  come  between  them  and  the 
people.  Mr.  Henry  Ward  Beecher  has  had  his  attention 
drawn  to  some  of  the  more  alarming  phases  of  our  present  po 
litical  condition.  In  a  recent  address  delivered  in  St.  Louis, 
he  used  the  following  language: 

"  I  must,  however,  make  haste  to  say,  that  among  the  dan- 
gers  of  the  times,  is  one  which  has  developed  out  of  the  pro 
digious  rapidity  of  the  accumulation  of  enormous  and  consoli 
dated  wealth.  If  I  stand  in  the  city  of  New  York  and  look 
southward,  I  see  a  railroad — the  Pennsylvania  Central,  that 
runs  across  the  continent  with  all  its  connections.  Its  leases 
and  branches  represent  a  capital  of  some  hundreds  of  millions 
of  dollars.  If  I  turn  my  eyes  to  the  north,  I  see  the  Erie, 
where  many  hundreds  of  millions  dollars  lie.  If  still  further  to 
the  north,  I  see  the  great  New  York  Central,  that  represents 
hundreds  of  millions  of  dollars.  These  three  roads  represent 
thousands  of  millions  of  consolidated  capital.  Now  suppose, 
in  any  emergency  the  railroad  interest  demands — suppose 
there  were  some  great  national  question  which  demanded  that 
the  president  of  the  United  States  should  be  a  man,  and  the 
senate  should  be  composed  of  men  playing  into  the  hands  of 
the  great  national  railroads'  concentrated  capitalists,  what  pow 
er  is  there  on  the  continent  that  could  for  a  moment  resist 
them?  It  is  not  a  great  many  years  since  it  would  seem  al 
most  atrocious  to  have  suggested  that  thought.  But  legisla 
tures  have  been  bought  and  sold,  until  we  think  no  more  about 
it  than  of  selling  so  many  sheep  and  cattle.  Does  any  body 
suppose  that  if  it  were  a  national  interest  that  these  vast  cor 
porations  were  seeking  to  subserve,  that  there  is  any  legisla 
ture  on  this  continent  that  could  not  be  crushed  or  bought  out 
by  this  despot,  compared  with  which  even  slavery  itself  were 
a  small  danger.  One  of  the  greatest  humiliations  of  a  nation 
that  is  justly  proud  of  so  many  things,  is  that  disaster  which 
has  fallen  upon  our  congress.  When  we  see  the  slimy  track 
of  the  monster,  we  may  justly  ask :  '  What  are  we  coming 


156  MONOPOLIES    AND    THE    PEOPLE. 

to  ??  There  has  got  to  be  a  public  sentiment  created  on  this 
subject,  or  we  will  be  swept  away  by  a  common  ruin.  I  tell 
you  that  the  shadow  that  is  already  cast  upon  the  land  is  pro 
digious.  I  do  not  believe  in  the  sociologists,  in  the  interna 
tional,  nor  the  communists;  but  when  I  see  what  rich  men,  as 
classes,  are  doing  with  our  legislatures,  what  laws  they  have 
passed,  what  disregard  there  is  to  the  great  common  interest, 
I  fear  that  the  time  will  come  when  the  workingmen  will  rise 
up  and  say,  that  they  have  no  appeal  to  courts,  no  appeal  to 
legislatures;  that  they  are  bought  and  owned  by  consolidated 
capital,  and  when  that  time  comes,  unless  it  brings  reforma 
tion,  it  will  bring  revolution;  and  if  any  such  time  does  come, 
I  do  not  hesitate  to  say  I  will  stand  by  the  common  people  for 
the  encouragement  of  the  working  people,  and  against  the 
wealth  of  the  consolidated  capital  of  the  land." 

This  great  consolidated  railroad  interest  now  has  its  cham 
pions  in  the  halls  of  congress.  In  the  senate  is  Dorsey,  presi 
dent  of  the  Arkansas  Central  railroad.  Patterson,  senator- 
elect  from  South  Carolina,  is  a  railroad  man.  Jones,  of  Ne 
vada,  Allison,  of  Iowa,  Mitchell,  of  Oregon,  Carpenter,  of 
Wisconsin,  and  Windom,  of  Minnesota,  and  others  are  recog 
nized  as  reliable  railroad  men.  In  the  house  we  have  Brooks, 
Kelly,  Schofield,  and  many  more  who  have  proved  their  fealty 
to  this  great  monopoly  on  many  occasions.  In  addition  to  the 
friends  of  these  corporations  in  the  legislative  halls,  paid  lob 
byists  throng  the  capital,  supplied  with  stocks  and  money,  to 
be  used  "where  it  will  do  the  most  good."  This  money  is 
supplied  by  the  railroad  companies  for  purchasing  votes  for 
favorite  measures,  and  the  recent  startling  developments  show 
that  this  fund  does  not  lie  idle.  All  this  has  resulted  in  cor 
rupt  legislation.  Congressmen  have  aided  in  procuring  grants 
and  special  privileges  to  companies  of  which  they  are  mem 
bers,  and  other  congressmen  have  listened  to  the  arguments  of 
lobbyists,  and  sacrificed  the  best  interests  of  the  people  to  pro 
mote  the  interests  of  these  monopolies. 

The  influence  of  railroad  companies  over  legislation  is  not 
confined  to  the  general  government.  It  develops  its  full 
strength  in  state  legislatures.  There  it  manifests  itself  openly. 
Eailroad  companies  nominate  and  elect  their  own  men  for  the 


GRASP    OF    CAPITAL    ON    LEGISLATION.  157 

avowed  purpose  of  securing  the  enactment  of  laws  favorable 
to  themselves.  Railroad  directors,  stockholders,  and  attorneys 
are  elected  to  the  legislature  because  their  interests  are  adverse 
to  those  of  the  people  ;  they  are  selected  to  defeat  all  legisla 
tion  tending  to  protect  or  relieve  the  people  from  the  oppres 
sion  of  these  corporations.  Paid  lobbyists  are  kept  in  attend 
ance  during  the  legislative  session  for  the  same  purpose.  Free 
passes  are  given  to  legislators  as  cheap  bribes,  and  money  and 
railroad  stock  and  bonds  are  placed  "  where  they  will  do  the 
most  good  "  to  the  railroad  interest.  By  the  use  of  all  these 
means,  majorities  in  the  interest  of  railroad  companies  are  se 
cured,  or  such  strong  minorities  as  will  prevent  unfriendly 
legislation.  As  a  fact,  now  a  part  of  the  history  of  the  country, 
the  legislatures  of  many  of  the  states  are  in  the  interest  of,  and 
controlled  by,  these  corporations.  They  shape  all  public  legis 
lation,  and  rule  the  affairs  of  the  state.  The  people  are  taxed 
and  robbed  by  their  own  legislatures.  Immense  sums  of 
money,  or  state  bonds,  are  donated  to  these  corporations,  and 
the  people  are  taxed  to  pay  them,  while  the  railroad  property 
is  practically  exempt  from  taxation.  The  legislature  of  the 
state  of  Louisiana  donated  to  a  single  railroad  company 
$3,000,000,  and  guaranteed  the  bonds  of  the  same  company 
for  about  as  much  more.  The  legislature  of  the  state  of  Ala 
bama  has  voted  to  different  railroad  companies  many  millions 
of  dollars.  The  same  is  true  of  Georgia,  Texas,  North  and 
South  Carolina,  and  many  other  states.  In  some  of  these 
states  men  who  were  elected  to  represent  the  people,  and  who 
were  pledged  in  their  interest,  have  openly  sold  themselves  to 
this  railroad  monopoly.  For  a  consideration  paid  to  them 
they  have  assisted  in  bankrupting  their  states,  and  reducing 
the  people  who  trusted  and  honored  them  to  a  state  of  servi 
tude,  scarcely  less  oppressive  than  the  old  system  of  African 
slavery.  The  value  of  property  is  destroyed  by  excessive  tax 
ation,  and  the  political  and  judicial  power  of  the  states  is 
handed  over  to  railroad  men,  who,  by  combining  their  inter 
ests,  have  created  a  great  central  power,  antagonistic  to  the 
people,  and  destructive  of  republican  institutions.  In  the 
northern  states  it  has  been  found  impossible  to  procure  just 
legislation  where  the  interests  of  railroads  and  of  the  people 


158  MONOPOLIES   AND   THE    PEOPLE. 

conflict.  In  addition  to  the  license  given  to  railroad  compa 
nies,  by  legislative  grants  and  special  privileges,  to  plunder 
the  people,  legislators,  in  violation  of  constitutional  provisions, 
and  of  every  principle  of  justice,  have  persistently  refused  to 
require  of  these  corporations  their  just  proportion  of  taxes,  and 
have  just  as  persistently  provided  for  taxing  the  people  to  aid 
railroad  corporations.  Take  the  state  of  Indiana  as  an  illus 
tration.  Counties,  cities,  and  towns  have  been  burdened  for 
years  with  unjust  taxation  because  of  legislation  in  favor  of 
local  aid  to  railroads.  In  that  state  there  are  now  three  thous 
and  five  hundred  and  twenty-nine  miles  of  railroads,  repre 
senting  about  $100,000,000.  For  the  purposes  of  taxation,  all 
of  this  railroad  property  represents  but  $10,000,000.  Some  of 
these  roads,  for  the  purposes  of  taxation,  are  appraised  at  $3,000 
per  mile,  and  some  as  low  as  $500,  and  $400.  While  the  property 
of  individuals  is  appraised  at  about  one-third  of  its  estimated 
value,  this  railroad  property  does  not  pay  taxes  upon  more 
than  one-tenth  part  of  its  estimated  value,  and  when  at  a  re 
cent  session  of  the  legislature  an  effort  was  made  to  amend 
the  statute  so  as  to  make  taxation  more  equal,  it  was  defeated 
by  the  railroad  men  in  the  legislature,  supported  as  they  were 
by  the  strong  lobby  whom  they  had  paid  to  be  in  attendance. 
The  history  of  railroad  legislation  in  the  state  of  Iowa  is  of 
the  same  glaring  character.  We  have  the  pleasure  of  laying 
before  our  readers  the  following  succinct  history  of  this  Iowa 
legislation,  from  the  pen  of  Hon.  Samuel  McNutt,  who,  for  the 
last  ten  years,  has  been  a  member  of  the  legislature  (six  years 
in  the  house  and  four  years  in  the  senate),  and  who  kindly 
furnishes  this  communication  at  our  request. 

HISTORY  OF  RAILWAY  LEGISLATION  IN  IOWA. 

HON.  D.  C.  CLOUD,  Muscatine,  Iowa:  — 

DEAR  SIR  :  The  progress  of  the  railroad  question  is  remark 
able  in  our  own  state.  As  a  member  of  the  Iowa  legislature, 
for  ten  consecutive  years,  I  have  had  occasion  to  note  that 
progress,  and  to  observe  the  advancement  of  that  interest 
from  struggling  infancy  to  vigorous  growth — from  feebleness 
to  a  strength  that  is  fearful  to  contemplate. 


GRASP    OF   CAPITAL    ON    LEGISLATION.          .  159 

The  people  of  Iowa,  through  their  legislature,  have  always 
been  eminently  friendly  to  the  construction  of  railroads  and 
the  promotion  of  the  railway  interests.  In  proof  of  this, 
witness  the  whole  history  of  our  legislation ;  witness  our 
magnificent  land  grants,  subsidies,  bonds,  subscriptions,  and 
taxes,  to  the  amount  of  five  per  dent  of  our  entire  valuation, 
in  one  year,  as  free  gifts  to  railroad  corporations.  And  yet 
some  of  these  corporations  have  cheated  us  as  people  never 
were  cheated  before.  We  have  afforded  immunities  to  capital 
invested  in  railroads  that  are  not  afforded  to  any  other  kind 
of  capital  in  the  state.  Witness  the  hitherto  almost  entire 
exemption  from  taxation  of  that  kind  of  property.  But,  more 
than  this,  we  have  laws  regulating  the  charges  to  be  made  by 
those  engaged  in  several  of  the  industrial  pursuits,  while  up 
to  the  present  time  there  has  been  no  law  upon  our  statute 
books  interfering  with  the  charges  made  by  railroad  corpora 
tions  ;  and  only  the  right  to  interfere  has  been  claimed  in  cases 
of  public  necessity,  where  those  corporations  are  guilty  of 
gross  extortion  or  unjust  discrimination. 

The  first'  grant  of  lands  to  aid  in  the  construction  of  rail 
roads  in  our  state  is  known  as  the  "  Iowa  Land  Bill,"  which 
passed  congress  and  was  approved  by  the  president,  May  15th, 
1856.  Under  this  act  there  has  been  certified  to  the  state,  to 
aid  the  four  original  land  grant  roads,  as  follows :  to  the  Bur 
lington  &  Missouri  River  railroad,  two  hundred  and  eighty- 
seven  thousand  acres;  to  the  Mississippi  &  Missouri  (now part 
of  the  Chicago,  Rock  Island,  &  Pacific)  railroad,  four  hun 
dred  and  seventy-four  thousand  six  hundred  and  seventy-five 
acres ;  to  the  Iowa  Central  (afterwards  the  Cedar  Rapids  & 
Missouri  River)  railroad,  seven  hundred  and  seventy-five 
thousand  and  ninety-five  acres ;  and,  to  the  Dubuque  &  Sioux 
City  railroad,  one  million  two  hundred  and  twenty-six  thous 
and  five  hundred  and  fifty-nine  acres.  On  the  12th  of  May, 
1864,  congress  passed  an  act  granting  lands  to  aid  in  the  con 
struction  of  another  railroad  across  the  state,  from  the  city  of 
McGregor,  westward,  on  or  near  the  forty-third  parallel,  to 
Sioux  City.  The  lands  in  this  grant  were  supposed  to  exceed 
a  million  of  acres,  but  were  found  afterwards  to  be  less  than 
half  a  million.  On  the  12th  of  July,  1862,  congress  authorized 


160  MONOPOLIES   AND   THE    PEOPLE. 

the  diversion  of  a  portion  of  the  Des  Moines  River  Improve 
ment  company's  land  grant  to  the  Des  Moines  Valley  railroad 
company,  the  amount  of  which  I  have  not  before  me.  It  is 
safe  to  say  that  all  these  railroad  land  grants,  taken  together, 
amount  to  over  four  millions  of  acres,  or  nearly  one-eighth  of 
the  land  of  the  state ;  or,  more  approximately,  one  acre  out  of 
every  eiyht  and  a  half  acres  of  the  entire  area  of  Iowa  has  been 
given  away  to  railroad  corporations.  In  addition  to  this  im 
mense  subsidy,  the  people  along  the  several  lines  contributed 
largely  toward  their  construction. 

On  the  14th  of  July,  1856,  the  general  assembly,  in  extra 
session,  passed  an  act  conveying  the  land  to  the  four  first 
mentioned  companies,  upon  certain  conditions.  Section  14  of 
that  act  (which  act  is  the  orginal  "  charter  "  of  those  corpora 
tions),  now  found  as  section  1,311  of  the  Revision  of  1860, 
reads  thus :  "  Said  railroad  companies  accepting  the  provisions 
of  this  act  shall  at  all  times  be  subject  to  such  rules  and  regu 
lations  as  may,  from  time  to  time,  be  enacted  by  the  general 
assembly  of  Iowa,  not  inconsistent  with  the  provisions  of  this 
act,  and  the  act  of  congress  making  the  grant." 

Under  this  "  charter"  the  companies  went  to  work,  and  when 
some  of  their  roads  were  extended  toward  the  interior,  com 
plaints  began  to  arise  that  the  railroad  tariffs  were  so  arranged 
as  to  seriously  discriminate  against  the  trade  and  commerce  of 
Iowa  towns  and  in  favor  of  points  out  of  and  beyond  the 
state ;  that  these  tariff'  rates  were  also  so  arranged  as  to  de 
prive  our  people  of  a  choice  of  markets,  rendering  the  Missis 
sippi  river  useless  as  a  highway  of  trade  and  commerce,  and 
compelling  our  people  either  to  pay  tribute  to  Chicago  or  go 
without  a  market.  The  evidence  in  this  matter  was  of  a  char 
acter  that  could  not  be  questioned,  and  although  the  subject 
was  brought  before  the  general  assembly  of  1864,  we  refused 
to  take  any  action  at  that  time,  hoping  that  the  companies 
which  had  been  so  liberally  dealt  with  by  our  people  would, 
upon  remonstrance,  deal  fairly  and  justly  by  them. 

When  the  general  assembly  met  again,  in  1866,  the  matter 
of  railroad  discriminations  against  our  people  had  assumed  a 
still  more  momentous  shape.  The  greater  portion  of  our  time 
during  that  session  was  occupied  with  that  question.  Weeks 


GRASP  OF  CAPITAL  ON  LEGISLATION.  161 

after  weeks  were  spent  mainly  discussing  whether  or  not  the 
state  had  the  right  to  prevent  unjust  discrimination  or  in  any 
way  control  railroad  corporations  as  to  their  charges.  The 
then  attorney  general  (Hon.  F.  E.  Bissell,  now  deceased)  gave 
it  as  his  officiaVopinion  that  the  state  possessed  no  such  right ; 
but  that  in  the  matter  of  tariff  charges,  those  corporations 
were  above  and  beyond  all  legislative  control.  Whether  the 
fact  that  he  was  a  "  railroad  attorney,"  as  well  as  attorney 
general  for  the  state,  had  anything  to  do  with  influencing  his 
"  opinion,"  is  not  for  me  to  say.  We  had  able  lawyers  of  the 
very  opposite  opinion,  but  the  fact  of  this  announcement  gave 
great  encouragement  to  the  railroad  party,  and  was  calculated 
to  dishearten  those  of  us  who  believed  that  the  people  had 
some  rights  which  even  corporations  should  respect.  It  was 
now  openly  declared  by  eminent  attorneys,  both  in  the  legis 
lature  and  in  the  powerful  "lobby"  that  hung  around  us,  that 
in  the  original  "  charter,"  or  grant,  the  state,  while  reserving 
the  right  to  "  enact  rules  and  regulations,"  had  either  failed  or 
neglected  to  reserve,  in  specific  and  "  express  terms,"  the  par 
ticular  right  to  regulate  and  limit  tariff  charges,  and  therefore 
she  could  not  now  exercise  that  right,  and  could  never  regain 
it. 

Listening  to  these  astounding  claims,  put  forth  by  the  attor 
neys  for  the  corporations,  some  of  us  declared  that  if  God  and 
the  good  people  of  Iowa  ever  gave  us  a  chance  to  reserve,  in  a 
railroad  charter,  the  right  of  control,  we  would  surely  do  it  in 
such  specific  and  "  express  terms  "  as  even  a  railroad  attorney 
could  neither  mystify  nor  explain  away.  The  golden  opportu 
nity  to  do  this  very  thing  occurred  in  1868.  A  certain  state 
of  facts  existed  regarding  the  management  of  the  Chicago, 
Rock  Island,  &  Pacific  railroad  company,  which  rendered  new 
legislation  necessary.  The  executive  committee,  headed  by 
John  F.  Tracy,  had  issued  and  put  upon  the  New  York  money 
market  nearly  four  million  dollars7  worth  of  "  watered  stock," 
and  realized  the  cash  for  it  before  certain  other  parties  were 
aware  of  what  had  been  done.  With  this  money  the  Tracy 
party  claimed  that  they  intended  to  build  the  road  from  Des 
Moines  to  Council  Bluffs  (the  road  at  this  time  being  complet 
ed  only  to  Des  Moines).  The  immediate  result  of  this  "  stock 
"20 


162  MONOPOLIES    AND   THE    PEOPLE. 

operation  "  was  a  bitter  quarrel  between  the  Tracy  and  the 
anti-Tracy  parties  of  the  stockholders.  The  Tracy  party  were 
said  to  be  in  the  minority,  but  they  had  the  money  and  the 
executive  committee.  Suits  were  commenced  against  them  in 
the  New  York  courts  to  forbid  their  construction  of  the  road 
west  of  DesMoines,  and  to  compel  them  to  disgorge  the  four 
millions  of  dollars  for  distribution  among  the  stockholders. 
In  the  meantime  the  company  had  forfeited  their  right  to  the 
land  grant  in  consequence  of  the  non-construction  of  the  road 
beyond  Des  Moines,  according  to  the  terms  of  the  original  act. 
The  consolidation  of  the  Chicago,  Rock  Island,  &  Pacific  rail 
road  company's  stock  (a  company  organized  under  the  laws  of 
Illinois)  with  that  of  the  Mississippi  &  Missouri  railroad  com 
pany  (organized  under  the  laws  of  Iowa),  needed  legislative 
sanction  by  the  general  assembly  of  Iowa;  and  further,  the  di 
rectors  of  the  consolidated  company  wanted  not  only  a  legal 
izing  act  covering  the  above  points,  but  also  an  extension  of 
their  term  of  office  for  one  year  beyond  the  time  for  which 
they  had  been  elected  by  the  stockholders. 

Under  this  state  of  things,  the  "  Tracy  party,"  legally  repre 
senting  the  consolidated  company,  applied  to  our  legislature 
for  relief  and  protection  ;  and,  accordingly,  a  bill  was  intro 
duced  covering  the  desired  points,  and  re-granting  the  lands 
to  the  company  under  certain  conditions  and  restrictions, 
which,  when  agreed  to  by  the  company,  should  remain  forever 
a  contract  between  the  state  and  the  company. 

At.  this  juncture,  one  of  the  ju.dges  of  the  supreme  court  of 
New  York  issued  a  solemn  injunction  upon  the  general  assem 
bly  of  Iowa,  forbidding  that  body  to  legislate,  in  any  way, 
upon  the  matters  I  have  above  recited.  Some  of  us,  not  hav 
ing  the  fear  of  New  York  courts  nor  the  majesty  of  Judge 
Cardozo  before  our  eyes,  fairly  laughed  at  that  judicial  func 
tionary's  lordly  impudence.  We  thought  that  the  grand  op 
portunity  had  now  arrived  when  the  state  could  justly  step  in 
and  pass  an  act  compelling  the  company  to  construct  the  road, 
for  the  sake  of  the  extraordinary  relief  sought,  and  in  that  act 
reserve,  in  "  express  terms,"  as  a  matter  of  contract,  the  right  to 
control  the  tariff  rates  of  at  least  one  powerful  corporation, 
connecting  with  the  Pacific  railroad  at  Council  Bluffs,  and 


GRASP  OF  CAPITAL  ON  LEGISLATION.          163 

thereby  control  the  rates  of  other  lines  crossing  the  state  with 
similar  connections.  This  express  reservation  of  right,  in  the 
form  of  what  was  known  as  the  "  Doud  Amendment,"  was  in 
serted  in  the  act  in  relation  to  the  Chicago,  Rock  Island,  & 
Pacific  railroad  company,  and  will  be  found  as  the  first  proviso 
in  the  second  section  of  that  act  (chapter  13,  on  page  14,  Acts 
of  Twelfth  General  Assembly),  and  is  in  the  following  words  : 
"  Provided,  said  railroad  company,  accepting  the  provisions  of 
this  act,  shall  at  all  times  be  subject  to  such  rules  and  regula 
tions,  and  rates  for  the  transportation  of  freight  and  passen 
gers,  as  may,  from  time  to  time,  be  enacted  by  the  general  as 
sembly  of  Iowa." 

The  company,  through  its  proper  officers,  accepted  the  terms 
of  this  act,  and  filed  that  acceptance  in  the  office  of  the  secre 
tary  of  state,  thus  closing  a  contract  between  the  state  and  the 
company,  and  setting  at  rest  forever  the  question  of  controlling 
and  regulating  the  charges  for  freight  and  passengers  in  favor 
of  the  state.  The  same  proviso  was  afterwards  inserted  in  the 
act  in  relation  to  the  Des  Moines  Valley  railroad  company 
(chapter  57,  page  63) ;  also  in  the  act  relating  to  the  McGregor 
"Western  railroad  company  (chapter  58,  page  67) ;  also,  in  the 
act  relating  to  the  Dubuque  &  Sioux  City  railroad  company 
(chapter  124,  page  164) ;  all  acts  of  the  twelfth  general  assem 
bly. 

The  passage  of  the  last  named  act  aroused  unusual  commo 
tion  along  the  proposed  railroad  line  from  Cedar  Falls,  via 
Fort  Dodge,  to  Sioux  City,  in  consequence  of  the  railroad 
managers  declaring  that  not  another  mile  of  that  road  would 
ever  be  built  until  the  proviso  for  control  should  be  repealed. 
Work  ceased  along  the  line ;  the  laborers  were  discharged ; 
the  people  who  expected  a  railroad  through  their  country  be 
came  alarmed.  Meetings  were  held  at  Fort  Dodge,  Sioux 
City,  and  other  points,  and  extraordinary  efforts  were  put  forth 
to  induce  Governor  Stone  to  call  an  extra  session  of  the  legis 
lature  for  the  purpose  of  repealing  the  so-called  "  Doud  Amend 
ment."  A  committee  of  prominent  citizens  was  appointed  to 
visit,  in  person,  the  members  of  the  general  assembly,  and 
have  them  sign  a  request  to  the  governor  in  favor  of  an  extra 
session.  This  committee,  knowing  my  record  on  this  ques- 


164  MONOPOLIES   AND   THE    PEOPLE. 

tion,  did  not  do  me  the  honor  of  a  personal  visit,  but  they  sent 
me  a  letter  (still  in  my  possession),  to  which  I  replied  through 
the  puhlic  press,  strongly  opposing  their  movement,  and,  after 
reciting  a  portion  of  the  facts  herein  recapitulated,  earnestly 
requested  them  to  let  the  Doud  Amendment  alone ;  for  I  be 
lieved  it  to  be  one  of  the  wisest  measures  ever  enacted  by  our 
legislature,  and,  having  been  one  of  its  foremost  advocates  in 
that  body,  I  would  still  defend  it.  The  effort  to  call  an  extra 
session  failed,  and  the  railroad  managers  in  the  north,  finding 
their  efforts,  in  that  instance,  vain,  after  frighten  ing  the  people 
nearly  a  year,  concluded  to  go  to  work  again,  and  so  'the 
building  of  that  road  went  on  to  completion. 

We  had  now  succeeded  in  making  the  question  of  control  a 
matter  of  contract  between  the  state  and  the  companies  above 
named ;  so  that,  so  far  as  they  are  concerned,  no  person  or 
authority  can  question  that  right.  Some  of  these  roads  being 
parallel  lines  across  the  state,  the  limitation  of  their  charges 
will  virtually  control  the  others. 

I  have  always  maintained  that  the  state,  by  virtue  of  her 
sovereignty,  possesses  the  right  to  regulate  and  limit  railroad 
charges,  whenever  the  public  necessity,  or  the  public  welfare 
requires  such  limitation,  without  any  special  reservation  in 
any  charter  or  contract.  But  inasmuch  as  eminent  counsel 
denied  it,  I  was  one  of  the  original  prompters  and  friends  of 
the  "  Doud  Amendment."  I  was  this  for  the  further  reason, 
also,  that  history  teaches  me  that  when  the  interpretation  of 
constitutions  or  doubtful  laws,  in  cases  where  the  poor  and 
humble  were  on  one  side  and  wealth  and  power  on  the  other 
side,  that  interpretation  has  been  almost  invariably  on  the  side 
of  wealth  and  power. 

During  the  session  of  1870,  the  question  of  regulating  and 
and  taxing  railroads  came  up  again ;  but  nothing  was  done  ex 
cept  the  passage  of  a  law  authorizing  the  state  treasurer  to 
levy  a  tax  on  their  gross  receipts,  as  follows :  On  the  first 
$3,000  or  part  thereof,  per  mile,  one  per  centum  ;  on  receipts 
over,  $3,000,  and  under  $6,000,  two  per  centum ;  and  on  the 
excess  of  $6,000  per  mile,  three  per  centum.  An  act  was  also 
passed  (which  I  opposed)  authorizing  townships,  towns,  and 
cities,  to  vote  a  tax,  not  exceeding  five  per  cent  ot  their  as- 


GRASP   OF   CAPITAL   ON   LEGISLATION.  165 

sessed  valuation,  to  aid  in  the  construction  of  railroads.  At 
this  session  I  succeeded  in  securing  the  passage  of  an  act 
(chapter  90,  acts  of  Thirteenth  General  Assembly)  providing 
that  taxes  levied  by  order  of  any  court  to  pay  judgments  on 
county  or  city  bonded  indebtedness,  no  penalty  but  legal  inter 
est  shall  be  collected. 

At  the  session  of  1872,  the  questions  of  railroad  tariffs,  tax 
ation,  and  control,  came  up  again  with  increased  interest. 
We  passed  an  act  (chapter  12  of  public  laws)  making  the  work, 
&c.,  of  laborers  and  mechanics  a  lien  upon  the  road  bed,  right 
of  way,  £c.,  of  railroads,  thus  securing  them  in  their  pay  for 
labor  done  or  materials  furnished.  The  five  per  cent  tax  law 
was  repealed,  and  an  act  (chapter  26  of  public  laws)  was 
passed,  making  the  census  board  (now  executive  council)  a 
board  of  assessment  of  railroad  property.  Under  this  act  a 
new  plan  of  assessing  this  kind  of  property  was  adopted,  and 
a  much  larger  revenue  derived  therefrom  than  heretofore.  A 
freight  and  passenger  tariff  bill  (known  as  the  O'Donnel  bill) 
passed  the  house,  but  failed  in  the  senate.  Those  of  us,  in 
the  senate,  who  voted  FOB  the  bill,  were  remembered  by  the 
railroad  managers  when  we  met  in  adjourned  session  last  win 
ter,  (January  15th,  1873)  by  leaving  us  out  of  the  list  of  sena 
tors  whom  they  favored  with  free  passes.  But  they  sent 
passes  to  all  the  senators  who  voted  against  the  bill.  The 
passes  from  the  Chicago,  Rock  Islard,  &  Pacific  railroad  com 
pany  were  accompanied  with  a  private  note,  stating  that  free 
passes  were  not  now  given  generally,  "  but  only  to  their  friends." 

The  adjourned  session  of  1873  was  for  the  special  purpose 
of  considering  and  enacting  the  new  code,  which  the  three 
commissioners  had  now  spent  nearly  three  years  upon.  Our 
time  was  limited  by  joint  resolution  to  thirty  days ;  and  yet, 
during  a  considerable  portion  of  our  limited  time,  the  railroad 
question  occupied  our  attention.  While  we  were  in  session, 
an  extraordinary  convention,  or  gathering  of  farmers,  known 
as  the  "  State  Grange  of  the  Patrons  of  Husbandry,"  met  in 
Des  Moines.  This  body  was  composed  of  the  officers  called 
Masters  and  Past  Masters  of  the  subordinate  granges,  or 
lodges,  of  a  new  secret  society  of  agriculturists  scattered 
throughout  the  state.  This  State  Grange,  or  convention  of 


166  MONOPOLIES   AND   THE   PEOPLE. 

delegates,  numbered  over  twelve  hundred  members,  represent 
ing,  it  was  said,  some  seventy  thousand  farmers  of  Iowa. 
The  meeting  of  this  "  Grange "  lasted  a  week,  and  passed 
strong  resolutions  urging  the  legislature  to  enact  a  passenger 
and  freight  tariff  law,  and  also  presented  an  official  petition  to 
that  effect. 

The  members  of  the  senate  in  favor  of  such  a  law  prepared 
twelve  sections  (mainly  from  the  old  O'Donnel  bill)  to  be  in 
serted  in  chapter  5  of  title  10,  of  the  proposed  code,  and  I  was 
chosen  to  offer  them  in  the  senate,  at  the  proper  time.  This 
I  did,  and  the  first  section  was  adopted  almost  before  the  rail 
road  men  could  rally  their  forces.  This  section  limits  the  fare 
for  passengers  to  three  and  one-half  (3J)  cents  per  mile.  But 
the  other  sections,  which  fixed  a  maximum  rate  for  the  trans 
portation  of  all  kinds  of  grain,  produce,  lumber,  manufac 
tures,  and  commodities,  were  lost  by  a  tie  vote,  the  president 
of  the  senate,  Lieutenant  Governor  Bulis,  refusing  to  vote, 
which  was  equivalent  to  voting  against  the  sections.  These 
sections  were  afterwards  fixed  to  the  chapter  by  the  House, 
with  an  additional  section,  known  as  the  "  Keables  Amend 
ment,"  but  were  again  lost  in  the  senate  for  want  of  two  votes. 

The  commissioners  had  omitted  from  the  proposed  new  code 
all  the  so-called  "  Doud  Amendments,"  and  reservations  of  con 
trol  by  the  state  over  railway  corporations,  on  the  ground  that 
they  were  local  or  special  provisions  not  to  be  included  in  a 
code  of  general  laws.  But  some  of  us  thought  that  those  res 
ervations  of  control,  and  special  contracts,  were  of  too  import 
ant  a  character  to  the  people  of  Iowa  to  be  entirely  ignored, 
and  so  I  prepared  an  amendment  to  chapter  5,  of  title  10,  in 
the  following  words  :  — 

"  SEC.  6.  All  contracts,  stipulations,  and  conditions,  regard 
ing  the  right  of  controlling  and  regulating  the  charges  for 
freight  and  passengers  upon  railroads,  heretofore  made,  in 
granting  lands  or  other  property,  or  franchises  to  railroad  cor 
porations,  are  expressly  reserved,  continued,  and  perpetuated, 
in  full  force  and  effect,  to  be  exercised  by  the  general  assembly 
whenever  the  public  good  and  the  public  necessity  requires 
such  exercise  thereof."  This  was  adopted. 


GRASP   OF   CAPITAL    ON    LEGISLATION.  167 

I  have  thus  hastily  sketched  the  history  of  railroad  legisla 
tion  in  our  state,  and  yet  perhaps  I  have  exceeded  the  space 
you  generously  allow  me  in  your  valuable  work.  Time  and 
space  would  not  permit  me  to  detail  the  skill  exercised  or  the 
means  used  to  defeat  every  act  of  legislation  looking  toward 
the  control  of  railway  corporations. 

To-day  both  the  people  and  the  government  of  this  nation 
are,  to  a  great  degree,  under  the  control  of  the  consolidated 
money  capital  of  the  country,  and  a  few  individuals  are  at  the 
head  of  this  capital.  These  are  men,  mainly,  who  regard  re 
publican  or  democratic  institutions  as  too  unstable  for  the 
security  of  wealth,  and  have  no  real  love  for  our  form  of  gov 
ernment.  It  remains  to  be  seen  what  the  people  will  do  in 
the  coming  crisis.  I  have  faith  in  the  people. 

Yours  truly,  SAMUEL  MoN"uTT. 

Mr.  MdSTutt  tells  what  he  knows,  and  gives  us  a  correct  idea 
of  the  means  resorted  to  by  these  corporations  to  thwart  the 
will  of  the  people.  In  view  of  the  vast  wealth  of  these  corpo 
rations,  their  combination  and  consolidation,  with  their  abso 
lute  control  of  congress  and  state  legislatures,  and  the  central 
ization  of  power  in  themselves,  we  may  well  inquire  whether 
our  constitutional  guarantees  have  not  been  so  long  disregarded 
as  to  be  virtually  destroyed.  The  question  at  issue  between 
the  people  and  'these  corporations  is  clearly  marked  and  de 
fined.  This  great  railroad  oligarchy  is  gradually  but  surely 
overturning  the  principles  upon  which  our  government  is 
founded.  It  is  substituting  a  personal  for  a  constitutional  gov 
ernment,  and  to  achieve  its  purposes,  it  brings  to  bear  its  vast 
wealth  and  influence ;  it  bribes  and  buys  legislators,  and  main 
tains  throughout  the  country  a  vast  army  of  employes,  many 
of  whom  occupy  high  official  position  under  the  government. 
It  now  boldly  proclaims  the  doctrine,  that  the  interests  of  this 
great  government,  and  of  railroads,  are  one ! 

On  the  other  side  of  the  question  are  the  people,  who  begin 
to  realize  the  oppressions  of  this  oligarchy.  They  find  them 
selves  burdened  with  taxes ;  the  value  of  the  produce  of  the 
country  consumed  in  unjust  railroad  charges;  the  halls  of  con 
gress  and  of  state  legislatures  cursed  by  the  presence  of  men 


168  MONOPOLIES   AND   THE    PEOPLE. 

who  take  and  give  bribes  in  aid  of  the  people's  oppressors ; 
their  natural  rights  denied  them;  the  guarantees  of  the  consti 
tution  disregarded ;  all  doubtful  points  decided  in  favor  of  the 
power  that  is  reducing  them  to  slavery,  and  making  their  prop 
erty  and  the  fruits  of  their  labor  of  no  value.  They  begin  to 
realize  that  the  final  struggle  must  soon  come,  and  that  the 
question  will  be  whether  the  people,  the  sovereign  people,  or 
their  oppressors  are  to  be  the  future  rulers  of  the  republic. 
The  result  is  not  uncertain.  Legislatures  and  courts  must  re 
store  to  the  people  their  constitutional  rights.  If  these  are  de 
nied,  then,  other  means  failing,  the  people,  who  are  sovereign, 
must  take  their  rights  by  revolution.  The  self-evident  truth  that 
all  men  are  equal,  that  they  have  equal  rights  to  enjoy  and 
possess  property,  and  to  the  protection  of  those  rights  in  the 
courts,  and  that  all  should  bear  their  proportionate  share  of 
the  public  burdens,  MUST  be  recognized,  by  all  classes,  as  the 
supreme  law  of  this  republic. 


CHAPTER   XVIII. 


THE  "TRAIL  OF  THE  SERPENT     IN  THE  INTERIOR  DEPARTMENT. 

"TT  yE  have  attempted  to  show  the  controlling  influence  of 
\  \l  railroad  corporations  over  the  legislative  department  of 

•  *  the  government,  and  its  effect  upon  the  people,  with 
out  following  it  through  all  its  various  forms,  our  object  being 
to  present  what  we  deemed  sufficient  evidence  to  direct  the 
public  mind  to  the  great  and  growing  evils  resulting  from 
this  influence.  We  now  desire  to  refer  to  the  influence  of 
these  coporations  over  the  executive  department  of  the  gov 
ernment. 

The  administration  of  the  laws  being  confided  to  the  ex 
ecutive  department  of  the  government,  their  impartial  and 
honest  administration  is  of  the  greatest  importance  to  the  peo 
ple.  Congress,  without  the  constitutional  right,  having 
granted  charters  and  made  large  grants  of  lands  and  bonds  to 
railroad  companies,  it  became  necessary  that  the  executive  de 
partment  should  have  some  kind  of  supervision  over  the  com 
panies.  In  the  issuing  of  bonds  and  certificates  for  land 
grants;  the  transportion  of  mails,  troops,  etc.;  the  appoint 
ment  of  government  directors,  inspectors,  and  engineers ;  the 
transmission  of  telegraphic  dispatches,  and  respecting  many 
other  matters  connected  with  these  corporations,  special  duties 
were  imposed  upon  the  president  and  members  of  his  cabinet. 
The  government  directors,  under  the  statute,  had  a  place  on 
all  business  committees  of  the  Union  Pacific  railroad  com 
pany.  They  were  government  officers,  appointed  by  the 
president,  and  were  to  report,  from  time  to  time,  upon  the  pro 
gress  of  the  work,  and  condition  of  the  roads.  They  were  pro 
hibited  from  owning  stock,  or  being  personally  interested  in 
the  roads.  Their  reports  were  to  be  made  to  the  secretary  of 
the  interior.  If  these  government  directors  had  faithfully 


170  MONOPOLIES    AND    THE    PEOPLE. 

performed  the  duties  laid  upon  them  by  the  law,  the  contract 
of  the  directors  of  the  railroad  company  with  the  Credit  Mo- 
bilier  company  couid  not  have  taken  place  without  their 
knowledge,  which  fact  should  at  once  have  been  communi 
cated  to  the  secretary  of  the  interior.  Nor  could  the  directors 
of  the  railroad  have  organized  themselves  into  a  Credit  Mo- 
bilier  company  and  contracted  with  themselves  to  rob  the  gov 
ernment  and  defraud  the  people,  without  the  knowledge  of 
the  government  directors.  And,  unless  we  concede  that  they 
were  totally  unfit  for  the  discharge  of  the  duties  imposed  upon 
them  by  statute — u  more  sinned  against  than  sinning" — we 
must  conclude  that  they  had  full  knowledge  of  all  the  abuses 
being  practiced  by  the  railroad  companies,  and  failed  to  dis 
charge  their  official  duties.  The  national  reputation  these 
government  directors  had  achieved  in  the  halls  of  congress, 
and  elsewhere,  precludes  the  idea  of  their  being  ignorant  of 
what  they  should  have  known,  and  we  are  forced  to  conclude 
that  they  had  this  guilty  knowledge  of  the  frauds  being  per 
petrated  upon  the  government  and  the  people.  Their  action 
in  the  premises  can  only  be  explained  on  the  ground  that  they 
were  subject  to  the  same  railroad  influences  which  have  con 
trolled  congress  and  state  legislatures.  If  their  action  was 
not  governed  by  corrupt  motives  and  pecuniary  considera 
tions,  that  persuasive  influence  which  emanates  from  these 
corporations,  blinded  their  minds  arid  warped  their  judgments 
to  such  an  extent  as  to  induce  them  to  wink  at  the  frauds  of 
the  companies  in  the  construction  of  their  roads  and  the 
prosecution  of  the  business  connected  therewith.  Recent  in 
vestigations  show  that  some  of  those  directors  were  controlled 
in  their  actions  by  pecuniary  considerations;  that  these  corpo 
rations  have  been  able  to  purchase  the  influence  of  the  men 
selected  by  the  president  to  protect  the  public  interest,  and 
that,  by  reason  of  such  purchase,  the  sum  of  $16,000  per  mile, 
in  government  bonds,  has  been  duplicated  on  fifty-eight  miles 
of  the  Pacific  road.  Other  abuses,  such  as  the  defective  con 
struction  of  the  roads,  unlawful  payment  by  the  government 
of  engineering  expenses,  dishonest  returns  of  the  cost  of  the 
roads,  and  other  minor  but  important  abuses  of  the  privileges 
granted  to  these  companies,  were  permitted  by  these  govern- 


FRAUD    IN    THE    INTERIOR    DEPARTMENT.  171 

ment  directors  without  objection,  showing,  beyond  all  reason 
able  doubt,  that  their  duties,  prescribed  by  acts  of  congress, 
were  of  secondary  importance  when  the  interests  of  the  cor 
porations  or  of  these  government  directors  were  to  be  con 
sidered. 

While  the  reckless  and  dishonest  transactions  of  the  com 
pany  directors  were  such  as  to  call  out  a  protest  from  an 
honest  engineer  employed  on  the  road,  prompting  him  to 
resign  his  position  as  chief  engineer  rather  than  be  a  party  to 
fraud  and  scandal,  these  government  directors  seem  to  have 
remained  silent  and  inactive.  A  contract  had  been  entered 
into  with  a  man  by  the  name  of  Hoxie,  who  had  neither  per 
sonal  means,  nor  position  to  command  any  considerable 
amount  of  capital,  for  the  construction  of  a  portion  of  the 
Union  Pacific  road.  While  this  contract  did  not  possess  all 
the  peculiarities  of  the  contract  with  the  Credit  Mobilier,  it 
was  such  an  outrage  upon  right  and  justice,  as  to  elicit  from 
the  chief  engineer,  Peter  A.  Dey,  the  following  letter,  ad 
dressed  to  General  John  A.  Dix,  after  having  tendered  his 
resignation  as  chief  engineer  of  the  Union  Pacific  road,  to 
General  Dix,  who  was  then  president  of  the  company.  Mr. 
Dey  says :  — 

"  My  views  of  the  Pacific  railroad  are  peculiar.  I  look 
upon  its  managers  as  trustees  of  the  bounty  of  congress.  I 
cannot  willingly  see  them  take  a  step  in  the  incipiency  of  the 
project,  that  will,  I  believe,  if  followed  out,  swell  the  cost  of 
construction  so  much  that  by  the  time  the  work  reaches  the 
mountains  the  representative  capital  will  be  accumulated  so 
much  that,  at  the  very  time  when  the  company  will  have  need 
for  all  its  resources,  of  capital  as  well  as  of  credit,  its  securities 
will  not  be  negotiable  in  the  market.  From  my  very  boy 
hood  I  have  associated  Mr.  Cisco  and  yourself  with  Mr.  Bron- 
son  and  Mr.  Flagg,  men  whose  integrity,  purity,  and  singleness 
of  purpose  have  made  them  marked  men  in  the  generation  in 
which  they  lived.  Of  course,  my  opinion  remains  unchanged. 
You  are,  doubtless,  uninformed  how  disproportionate  the 
amount  to  be  paid  is  to  the  work  contracted  for.  I  need  not 
expatiate  upon  the  sincerity  of  my  course,  when  you  reflect 


172  MONOPOLIES    AND   THE    PEOPLE. 

upon  the  fact  that  I  have  resigned  the  best  position  in  my 
profession  this  country  has  ever  offered  to  any  man. 

"  With  respect. 

"  PETER  A.  DEY." 

Mr.  Dey  protested  against  the  extravagant  amount  agreed  to 
be  paid  Hoxie.  The  cost  of  the  sections  of  the  road  contracted 
to  Hoxie  was  $7,806,181.  The  amount  agreed  to  be  paid  Hoxie 
for  the  work  was  $12,974,416.  Mr.  Dey  saw  that  this  man 
Hoxie  was  a  straw  man,  and  that  near  $5,000,000  were  to  be 
divided  among  the  directors  as  the  profit  on  this  contract,  and, 
as  engineer,  he  protested  against  it.  Yet  these  government 
directors,  whose  sole  duty  it  was  to  look  after  and  protect  the 
interests  of  the  government  and  the  people,  failed  to  discover 
and  report  these  abuses  to  the  secretary  of  the  interior ;  or,  if 
tbe  same  and  the  Credit  Mobilier  transactions  were  so  re 
ported,  then  the  influence  of  these  corporations  controlled  the 
department  of  the  secretary.  The  truth  is,  the  position  of 
these  government  directors  was  such  that,  without  a  total  dis 
regard  of  the  statutes,  and  their  dutres  under  it,  it  was  not 
possible  to  keep  all  knowledge  of  these  gross  abuses  from  the 
department.  But  one  conclusion  can  be  drawn  from  the  facts, 
which  is,  that  the  government  directors,  influenced  by  these 
powerful  monpolies,  were  unfaithful  to  the  trust  confided  to 
them  by  the  president. 

Under  the  statute,  the  secretary  of  the  interior  has  the  gen 
eral  control  of  the  issue  of  bonds,  certificates  for  lands,  rights 
of  way,  &c.  The  government  directors  were  bound  to  report 
to  him.  If  the  duties  imposed  under  the  law  had  been  faith 
fully  discharged  by  him,  the  great  abuses  practiced  by  the  Pa 
cific  railroad  companies  would  have  been  prevented.  The 
Hoxie  contract,  the  Ames  Credit  Mobilier  contract,  and  the 
Davis  contract,  were  all  made  for  about  double  the  cost  of 
building  the  respective  sections  of  the  road  covered  by  these 
contracts,  the  actual  cost  of  these  respective  sections  being 
$50,720,957,  and  the  amounts  allowed  the  contractors  being 
$93,546,387.  In  this  amount  is  concluded  $1,104,000,  which 
was  a  duplicate  payment  allowed  Ames  for  work  done,  and 
once  paid  for,  under  the  Hoxie  contract.  These  three  jobs 
put  into  the  pocket  of  the  Credit  Mobilier  company  a  net  profit 


FRAUD    IN   THE    INTERIOR    DEPARTMENT.  173 

of  $43,929,337,  a  large  part  of  which  was  in  subsidy  bonds  is 
sued  by  government.  These  bonds  could  only  issue  after  the 
approval,  by  the  secretary  of  the  interior,  of  the  report  of  the 
government  directors.  If  the  secretary  had  discharged  his 
duty,  or  if  the  interest  of  the  people,  which  he  was  supposed 
to  be  protecting,  and  not  the  interest  of  these  companies,  had 
controlled  his  action,  duplicate  bonds  would  not  have  been  is 
sued  at  the  rate  of  $16,000  per  mile,  for  more  than  fifty  miles 
of  the  road.  Nor  would  certificates  for  land  have  issued  to 
the  companies  while  they  were  openly  cheating,  defrauding, 
and  robbing  the  government  and  people.  Let  the  reader  look 
at  the  laws  of  congress  chartering  the  roads,  with  the  different 
amendments,  and  learn  the  duties  of  the  secretary  of  the  inte 
rior  respecting  their  construction  and  the  issuing  of  bonds 
and  land  certificates,  and  he  will  conclude  that  the  secretary 
was  ignorant  of  what  the  law  made  it  his  duty  to  know — that 
he  was  inexcusably  negligent  in  the  discharge  of  his  duty,  or 
what  is  most  probable,  that  the  same  potent  influences  that 
controlled  congress  in  aiding  these  companies,  found  their 
way  successfully  to  the  chief  parlor  of  the  interior  department. 
Without  the  secretary's  approval  of  the  companies'  work  and 
accounts,  they  could  not  possibly  have  committed  such  gross 
frauds  upon  the  government. 

If  additional  proof  of  the  fact  that  the  secretary  of  the  inte 
rior  was  influenced  by,  and  used  his  official  position  to  assist 
the  railroad  corporations,  in  the  raids  upon  the  treasury,  was 
needed,  we  have  it  in  his  action  relative  to  the  homestead  and 
pre-emption  rights  of  settlers  upon  the  public  lands,  within  the 
limits  fixed  by  congress  for  the  selection  of  lands  by  the  differ 
ent  railroad  companies.  In  all  cases  where  lands  hav^  been 
granted  to  railroad  companies,  lands  to  which  pre-emption 
rights  attached  at  the  time  the  line  of  the  road  was  fixed  have 
been  saved  to  the  pre-emption  and  homestead  claimants.  In 
many  instances  the  railroad  companies  have  not  been  able  to 
find,  within  the  limits  fixed,  the  amount  of  lands  granted  to 
them  belonging  to  the  government:  This  has  caused  them  to 
make  war  upon  pre-emption  and  homestead  claimants.  If 
these  claimants  could  be  forced  from  their  lands,  some  mill 
ions  of  acres  would  be  thus  seized  by,  and  allowed  to,  the  rail- 


174  MONOPOLIES    AND   THE    PEOPLE. 

road  companies.  The  practice  of  going  upon  the  public  land 
under  the  pre-emption  and  homestead  acts  had  become  so  com 
mon,  that  these  claims  had  been  recognized  by  the  public  and 
the  government  as  vesting  in  the  claimant  a  title,  which  could 
only  be  defeated  by  his  failure  to  comply  with  the  provisions 
of  the  law  respecting  the  perfection  of  his  title.  No  one,  save 
where  two  or  more  pre-emption  claimants  were  contending  for 
the  same  tract,  could  interfere ;  nor  is  there  any  provision  of 
statute  by  which  railroad  companies  can  call  in  question  the 
pre-emption  or  homestead  right.  In  the  absence  of  any  con 
test  between  pre-emptors,  the  claimant  has  only  to  show  a  sub 
stantial  compliance  with  the  law,  pay  the  required  amount,  and 
obtain  his  title.  So,  also,  in  regard  to  homestead  rights.  Nor 
did  any  difficulty  arise  until  railroad  companies  began  to  inter 
fere.  The  acts  granting  lands  to  railroad  companies  made  no 
provision  for  the  selection  by  them  of  lands  held  by  pre-emp 
tion  or  homestead  claimants  at  the  time  the  lines  of  their  roads 
were  fixed,  and  subsequently  abandoned.  The  companies  ap 
plied  to  the  secretary  of  the  interior,  and  procured  from  him 
a  construction  of  the  statutes,  giving  them  the  right  to  select 
as  railroad  lands  all  such  so  abandoned.  This  was  the  first 
decision  in  their  favor,  and  committed  the  secretary  to  their 
interest. 

A  war  upon  pre-emption  and  homestead  claimants  was  be 
gun,  and  the  representation  to  the  department  that  a  claimant 
had  abandoned  his  claim  was  sure  to  pass  the  title  to  one  hun 
dred  and  sixty  acres  to  the  company.  But  something  more 
must  be  done  to  get  hold  of  the  claimed  land.  The  question 
as  to  the  regularity  and  validity  of  the  settler's  claim  is  raised 
by  the  companies,  and  then  they  apply  again  to  the  secretary 
of  the  interior.  While  the  statute  respects  and  protects  the 
occupancy  and  rights  of  the  claimant,  the  secretary,  to  aid  the 
railroad  companies,  interpolates  the  word,  "  valid,"  and  holds 
that  if  the  claim  is  invalid,  the  railroad  companies  can  drive 
off  the  claimant  and  take  his  land.  The  action  of  the  depart 
ment  gave  the  companies  an  advantage  over  the  claimant 
which  was  almost  equivalent  to  the  destruction  of  his  claim. 
Many  claimants  became  alarmed,  and  did  just  what  the  com 
panies  desired, — they  abandoned  their  claims  to  their  oppres- 


FRAUD   IN  THE   INTERIOR   DEPARTMENT.  175 

sors,  and  the  companies  made  large  gains.  But  the  claimants 
were  not  yet  entirely  in  the  power  of  their  oppressors,  and  re 
sort  is  again  had  to  the  department,  and  the  settlers  aro  placed 
entirely  at  the  mercy  of  these  monopolies.  .The  interior  de- 
partmont  issued  an  order  under  date  of  June  22,  1872,  allow 
ing  railroad  companies  to  contest  the  right  of  pre-emption  and 
homestead  claimants  to  their  quarter-sections.  While  the  act 
of  congress  absolutely  prohibited  railroad  companies  from  in 
terfering  with  the  rights  of  these  claimants,  the  interior  de 
partment,  in  the  interest  of  these  giant  monopolies,  in  viola 
tion  of  the  statute,  by  interpolation  and  a  forced  construction 
of  the  law,  allowed  these  corporations  to  appear  and  dispute 
the  claim  of  the  poor  pioneer  who  had  gone  in  advance  of 
railroads,  and  pre-empted  a  small  tract  of  land  for  a  home  for 
his  family,  before  the  company  disputing  his  right  was  organ 
ized,  or  had  thought  of  locating  a  railroad  in  his  vicinity.  The 
pre-emption  and  homestead  laws  were  passed  for  the  benefit  of 
the  actual  settlers  of  the  country.  If  they  get  their  lands,  they 
pay  the  government  the  price  fixed  by  law ;  but  if  the  railroad 
companies  get  these  lands,  they  aid  in  building  up  and 
strengthening  a  monopoly  already  too  great  for  the  welfare  of 
the  country.  The  department  having  lent  its  powerful  aid  to 
this  monopoly,  and,  by  unjust  rulings,  interpolations,  and  de 
cisions,  assisted  in  turning  these  poor  men  adrift  and  depriv 
ing  them  of  their  lands  and  years  of  toil,  already  more  than 
one  million  of  acres  that  of  right,  and  under  the  law,  properly 
interpreted  and  administered,  would  have  belonged  to  actual 
settlers,  have  become  the  property  of  these  railroad  companies. 
Claimants  are  becoming  alarmed  at  the  action  of  the  depart 
ment,  and  are  leaving  their  lands,  choosing  to  lose  their  claims 
and  the  years  of  toil  expended  upon  them,  rather  than  defend 
against  these  companies,  backed  by  the  department. 

To  still  further  show  the  quasi  collusion  between  the  depart 
ment  and  these  great  corporations,  let  us  look  at  the  circular 
issued  to  the  different  land  offices  from  the  department  in 
June,  1872.  The  circular  says  : — 

"  A  pre-emption  or  homestead  claim  of  record  is  of  course 
prima  facie  evidence  of  a  valid  right ;  yet  it  may  occur  that 
such  a  claim  has  a  fraudulent  inception.  When  such  is  the 


176  MONOPOLIES    AND   THE    PEOPLE. 

case,  the  claim  is  of  course  void  ab  initio,  and  does  not  defeat, 
the  right  of  the  railroad.     In  view  of  these  rulings  the  follow 
ing  is  communicated  for  your  information  and  government,  to 
the  end  that  the  rights  of  all  parties  may  be  protected,  and 
the  spirit  of  the  grants  fully  complied  with  :— 

"  1st.  In  relation  to  pre-emption  claims,  the  pre-emption  law 
requires  that  a  person  must  be  over  the  age  of  twenty-one 
years,  or  the  head  of  a  family,  a  citizen  of  the  United  States, 
or  a  person  who  has  tiled  a  declaration  to  become  such,  and 
also  that  a  person  may  file  a  pre-emption  claim  for  such  land 
as  he  may  have  settled  upon,  thus  imposing  conditions  as  pre 
requisite  to  the  initiation  of  a  claim. 

"  2d.  In  relation  to  homestead  claims,  the  law  requires  that 
a  person  must  be  over  twenty-one  years  of  age,  or  the  head  of 
a  family,  a  citizen  of  the  United  States,  or  one  who  has  de 
clared  his  intention  to  become  such,  and  under  the  first  and 
third  sections  of  the  amendatory  act  of  March  21,  1864,  the 
persons  claiming  the  benefit  of  said  sections  must  make  settle 
ment  upon  the  tracts  before  they  can  obtain  the  benefit  of  said 
sections.  Therefore,  as  the  fraudulent  character  of  the  pre 
emption  or  homestead  claim  in  its  inception  may  be  brought 
in  question,  it  is  right  that  the  parties  in  interest  should  have 
an  opportunity  in  all  cases  to  be  heard.  With  this  view  you 
are  required, — 

"  3d.  When  application  is  made  by  a  railroad  company  to 
select  tracts  which  are  covered  by  existing  pre-emption  or 
homestead  claims  at  the  date  of  the  right  of  the  road  attach 
ing,  but  subsequently  relinquished  or  abandoned,  to  allow  the 
company  to  file  such  proof  as  they  may  have  in  support  of 
their  right  to  the  land,  or  to  have  hearings  for  the  purpose, 
and  should  the  evidence  be  satisfactory  you  will  permit  the 
selections. 

"  4th.  When  any  person  applies  to  enter  a  tract  of  such  lands, 
claiming  the  right  to  do  so  by  such  prior  abandoned  claim,  you 
will  order  a  hearing,  notifying  the  railroad  company,  as  well 
as  the  pre-emption  or  homestead  claimant,  so  that  they  may 
produce  such  evidence  in  support  of  their  right  as  they  may 
have  to  furnish.  Your  inquiry  must  be  directed  to  the  per 
sonal  qualifications  of  the  original  claimant,  and  his  compli- 


FRAUD    IN   THE    INTERIOR    DEPARTMENT.  177 

ance  with  the  law  prior  to  tiling  an  entry ;  and  I  desire  to  en 
join  upon  you  the  necessity  of  excluding  all  testimony  not 
material  to  showing  the  facts  upon  the  subject  of  inquiry. 
You  will,  however,  be  careful  that  all  such  facts  are  brought 
out,  and  if  necessary  to  this  end  you  will  yourselves  examine 
and  question  the  witnesses.  You  will  in  all  cases  give  the 
parties  interested  personal  notice  of  the  time  .and  place  of 
hearing,  when  their  whereabouts  are  known,  or  they  can  be 
reached  by  such  notice.  In  other  cases  you  will  cause  the  no 
tice  of  contest  to  be  published  at  least  once  a  week  for  four 
weeks  in  the  newspaper  having  the  largest  circulation  in  the 
vicinity  of  the  land.  Parties  initiating  a  contest  must  provide 
for  defraying  the  expenses  thereof,  but  when  the  case  comes 
before  you  for  trial  you  can  apportion  the  expenses  according 
to  the  equities  of  each  case.  Your  particular  attention  is 
called  to  the  fact  that  in  some  of  the  earlier  railroad  grants, 
lands  covered  by  homestead  claims,  which  may  subsequently 
be  cancelled,  are  not  exempted  from  the  operation  of  the  grant. 
Therefore,  in  such  cases,  the  tracts  revert  to  the  grant,  and 
you  will  recognize  no  application  for  these  lands  by  other  par 
ties,  but  will  pay  due  regard  to  the  rights  of  the  grantees. 
You  will  in  no  case  allow  pre-emption  filing,  or  homestead 
entry  on  this  class  of  lands,  without  instructions  from  this 
office." 

This  circular,  in  the  interest  of  railroad  companies,  is  signed 
by  Willis  Drummond,  commissioner,  and  directed  to  registers 
and  receivers  of  district  land  offices.  While  the  acts  of  con 
gress  exclude  from  the  grants  to  railroad  companies  all  lands 
held  ,  by  pre-emption  and  homestead  claims,  the  secretary  of 
the  interior  says  it  mean*'  valid  claims.  He  then  declares  all 
laims  invalid  or  fraudulent  when  there  has  not  been  a  literal 
compliance  with  the  statute.  If  the  pre-emptor  tiled  his  claim 
one  day  or  one  week  before  he  commenced  his  occupation,  his 
claim,  as  against  the  railroad  company,  is  fraudulent,  Or,  if 
for  some  cause,  after  having  complied  with  all  preliminaries, 
he  should  leave  his  claim  for  a  day  or  a  week,  it  could  be 
treated  as  abandoned,  and  his  right  would  be  lost.  These 
rulings,  in  favor  of  railroad  companies,  and  adverse  to  the  set 
tlers,  having  been  made,  the  companies  were  not  slow  in 
22 


178  MONOPOLIES   AND   THE    PEOPLE. 

taking  advantage  of  them.  Men  who  supposed  their  claims 
to  be  valid,  who  had  invested  their  all  in  improving  them, 
have  had  their  validity  questioned,  or  have  been  charged  with 
abandonment.  The  first  intimation  a  settler  has,  is  a  notice 
to  appear  and  defend  the  home  of  his  family  against  the  claim 
of  a  powerful  corporation  that  is  seeking  to  take  it  from  him. 
He  must  submit  to  the  alternative  of  losing  his  home  at  once, 
or  of  protracted,  expensive  litigation,  with  the  assurance  that 
he  is  combatting  a  powerful  adversary  before  a  tribunal  that 
has  already  prejudged  his  case  in  favor  of  his  opponent.  All 
that  the  railroad  companies  need  do  to  defraud  the  settler  is 
to  satisfy  the  register  or  receiver  that,  under  the  rulings  of  the 
department  we  have  quoted,  the  settler's  claim  is  invalid,  or 
that  he  has  abandoned  it. 

We  draw  no  fancy  sketch.  The  circular  speaks  for  itself, 
and  the  large  number  of  men  who  have  been  compelled  to 
leave  their  pre-emption  and  homestead  claims,  with  the  con 
stantly  increasing  quarter-sections  of  land  that  are  being  added 
to  the  railroad  grants,  attest  the  truth  of  our  statements.  We 
are  not  aware  of  any  lawT  of  the  United  States  recognizing  the 
right  of  railroad  companies  to  become  parties  in  a  contest  con 
cerning  a  homestead  or  pre-emption  right.  NOT  do  we  believe 
that  the  interior  department  of  the  government  can  legally 
authorize  these  companies  to  become  claimants  for  lands  held  by 
settlers  under  act  of  congress.  If  any  question  arises  between 
two  pre-emption  claimants,  the  commissioner  of  the  genera/ 
land  office  decides  the  dispute.  If  any  question  is  raised  as  to 
whether  the  claimant  is  entitled  to  his  pre-emption,  there  are, 
under  the  acts  of  congress,  but  two  parties  to  the  controversy 
—  the  claimant  himself  and  the  interior  department.  The  or 
der  allowing  railroad  companies  to  appear  as  parties,  and  by 
virtue  of  numerical  strength  and  immense  wealth  and  influ 
ence,  to  overpower  the  settler,  is  doing  him  injustice,  as  well 
as  degrading  a  high  official  position,  and  sustains  onr  charge 
that  these  railroad  companies  influence  the  interior  depart 
ment  of  the  government.  We  think  we  have  shown  that  the 
whole  strength  of  this  department  is  useH  in  favor  of  these 
great  monopolies,  and  against  the  interests  of  the  people. 


FRAUD    IN   THE    INTERIOR    DEPARTMENT.  179 

While  we  do  not  charge  the  officers  of  this  department  of 
government  with  intentional  wrong,  we  do  charge  that  this 
great  corporate  power,  which  has  such  unlimited  influence 
over  the  legislative  department  of  the  government,  has  virtu 
ally  taken  control  of  the  department  of  the  interior  in  cases 
where  its  interests  can  be  subserved  by  the  influence  of  the 
department. 


CHAPTER    XIX. 


THE  MONOPOLISTS  AT  THE  DOOR  OF  THE  WHITE  HOUSE. 

THE  influence  of  this  great  corporate  power  does  not  spend 
all  its  force  at  the  interior  department,  but  it  is  seen 
handing  in  its  card  at  the  white  house. 

While  we  claim  that  railroads  and  other  corporations  have, 
to  a  considerable  extent,  inflenced  the  distinguished  occupants 
of  the  presidential  chair,  we  do  not  wish  to  be  understood  as 
intimating  that  any  of  our  chief  magistrates  have  acted  cor 
ruptly.  We  simply  assert  that  this  great  corporate  interest  has 
secured  favorable  action  from  our  presidents  when  they  have 
been  appealed  to.  As  will  be  seen  by  their  perusal,  the  acts 
of  congress  chartering  the  Pacific  railroad  and  branches,  im 
posed  certain  duties  upon  the  president  in  connection  with 
their  location  and  construction.  In  the  discharge  of  these 
duties  the  wishes  of  the  companies  were  in  all  cases  complied 
with,  and  in  some  instances  to  the  injury  and  at  the  cost  of 
the  government  and  the  public,  and  under  circumstances  leav 
ing  no  doubt  that  the  president  acted  wholly  upon  the  repre 
sentations  of  the  companies. 

In  the  act  of  July,  1864,  the  Unidn  Pacific  charter  was  so 
amended  as  to  permit  any  company  organized  under  the  laws 
of  Iowa,  Minnesota,  Nebraska,  or  Dakota,  and  designated  by 
the  president  of  the  United  States,  to  construct  a  railroad  from 
Sioux  City,  Iowa,  to  connect  with  the  Union  Pacific  road  at 
some  point  not  farther  west  than  the  one-hundredth  degree  of 
longitude.  A  company  was  organized  under  the  laws  of  Iowa 
to  build  a  railroad  from  Sioux  City  to  Missouri  Valley  in  the 
same  state,  the  latter  point  being  some  thirty  miles  east  of 
Sioux  City,  and  seventy  or  more  miles  south.  Another  com 
pany  was  organized  to  build  a  railroad  from  Missouri  Valley 
to  Fremont,  in  Nebraska,  the  latter  place  being  a  point  on  the 


THE  MONOPOLISTS  AT  THE  DOOR  OF  THE  WHITE  HOUSE.        181 

Union  Pacific.  These  companies  were  incorporated  by  a 
few  men,  among  whom  were  several  members  of  congress 
who  had  aided  in  the  passage  of  the  act  of  July,  1864. 
Through  the  influence  of  one  of  the  iiicorporators,  then  a 
member  of  congress,  now  of  the  United  States  senate,  the 
president  designated  these  companies  as  the  companies  to  build 
the  Sioux  City  branch  of  the  Union  Pacific,  and  their  roads, 
representing  two  sides  of  a  triangle,  were  adopted  as  the 
branch  road.  The  road  is  known  as  the  Sioux  City  &  Pacific. 
A  road  running  westerly  from  Sioux  City  to  Fremont  would 
be  about  seventy-five  miles  in  length.  The  road,  as  construc 
ted  between  these  two  points,  is,  as  given  in  the  Railroad 
Manual,  one  hundred  and  seven  miles.  The  act  of  congress 
required  the  road  to  be  constructed  on  the  most  direct  and 
practicable  route.  This  road  received  the  same  privileges, 
subsidies,  and  grants,  as  the  main  line,  with  an  addition  of 
eighty  sections  of  land  per  mile.  Now  it  cannot  be  presumed 
that  the  president,  acting  on  his  own  judgment,  uninfluenced 
by  the  railroad  company,  would  have  designated  these  com 
panies,  and  these  roads,  as  the  Sioux  City  branch  of  the  Union 
Pacific  road,  with  one  hundred  sections  of  land  and  $16,000 
subsidy  bonds  for  every  mile  of  the  road.  We  have  given 
this  instance  to  show  the  direct  influence  of  this  corporate 
power  over  the  president.  This  great  influence,  so  dangerous 
to  the  welfare  of  the  country,  is  indirect  in  its  action.  Vast 
numbers  of  men  have  their  funds  invested  in  railroad  stocks 
and  bonds.  They  engage  in  Wall  street  speculations ;  they 
buy  and  sell  stocks  and  bonds ;  they  operate  in  gold  and  val 
ues,  and  have  no  interest  in  common  with  the  laboring  and 
producing  classes  of  the  country.  These  corporations  own 
and  control  property  worth  billions  of  dollars ;  they  rule  the 
finances  of  the  country ;  they  have  tens  of  thousands  of  men 
in  their  employ ;  as  they  increase  in  strength  and  wealth,  they 
are  constantly  striving  for  greater  powers  and  privileges. 
Their  lobbyists  and  retainers  surround  every  department  of 
the  government.  When  public  ofiices  are  to  be  filled,  they 
unite  in  favor  of  men  in  their  interest ;  and  when  decisions 
are  to  be  made  upon  questions  affecting  their  rights  and  obli 
gations,  they  take  care  that  their  friends  shall  be  in  position  to 


182  MONOPOLIES   AND    THE    PEOPLE. 

make  or  shape  these  decisions.  The  president,  with  his  ap 
pointing  power,  if  influenced  in  their  favor,  becomes  an  im 
portant  ally.  In  his  appointments  to  office,  it  is  not  to  be 
expected  that  he  can  personally  know  the  qualifications  and 
views  of  every  nominee.  He  must  of  necessity  rely  upon 
others,  to  a  great  extent,  in  making  his  selections.  Next  to 
legislative  action  in  their  favor,  railroad  companies  are  most 
deeply  interested  in  the  judicial  decisions  affecting  their  inter 
ests.  Judges  are  apt  to  be  influenced  by  the  same  motives 
that  prevail  with  other  men.  Years  spent  by  men  as  railroad 
attorneys,  or  as  attorneys  for  any  other  great  interest,  will,  to 
a  certain  extent,  control  their  reasoning  and  decisions  upon 
questions  coming  before  them  should  they  be  promoted  to  the 
bench.  In  close  relation  with,  and  next  in  importance  to  the 
decisions  of  courts,  on  points  affecting  this  great  corporate 
interest,  are  the  rulings  and  decisions  of  the  attorney  general 
of  the  United  States.  If  these  important  offices  can  be  filled 
by  persons  whose  past  pursuits  have  demonstrated  that  they 
entertain  views  favorable  to  the  interests  of  these  companies, 
an  important  gain  is  made  at  the  start  in  their  favor.  To 
secure  such  appointments,  all  and  every  influence  at  the  com 
mand  of  these  corporations  are  brought  to  bear  upon  the 
president.  The  services  of  the  most  influential  men,  in  con 
gress  and  out,  are  engaged ;  the  names  of  the  candidates 
selected  are  presented  for  the  consideration  of  the  president, 
and  their  appointment  urged  by  the  whole  railroad  and  cor 
porate  interest  of  the  country.  The  president,  following  a  long 
established  precedent,  usually  appoints  the  persons  who  are 
most  strongly  recommended.  This  fact  is  well  understood  by 
these  corporate  interests  and  hence  their  vigilance  and  activity. 
We  do  not  say  that  the  president,  in  yielding  to  this  tremen 
dous  pressure,  acts  from  improper  motives.  We  simply  assert 
that  this  pressure  is  used,  and  that  it  is  scarcely  to  be  resisted. 
The  fact  that  judges  of  ability  and  integrity  differ  in  their 
construction  of  the  constitution  and  laws,  is  well  understood 
by  the  men  who  lead  and  control  the  corporate  interests  of  the 
country ;  as  also  the  further  fact  that  the  time  is  not  distant 
when  the  question  whether  the  people  or  railroad  corporations 
shall  govern,  must  be  determined.  To  prepare  for  this  issue 


THE  MONOPOLISTS  AT  THE  DOOR  OF  THE  WHITE  HOUSE.        183 

they  use  their  great  influence  to  have  the  important  positions 
in  the  government  occupied  by  their  friends.  To  a  consider 
able  extent  they  have  succeeded. 

Mr.  Ackerman,  of  North  Carolina,  was  attorney  general. 
He  was  what  might  be  termed  a  strict  constructionist.  His 
views  were  conservative.  As  the  legal  adviser  of  the  execu 
tive  department,  his  opinions  were  adverse  to  the  interests  of 
the  railroad  companies  on  certain  questions  submitted  to  him. 
At  the  request  of  the  president  he  resigned,  and  Judge  Wil 
liams,  of  Oregon,  was  appointed  in  his  stead.  .No  one  will 
question  the  integrity  of  the  present  attorney  general.  Yet 
it  was  a  well-known  fact  that,  at  the  date  of  his  appointment, 
he  was  one  of  the  attorneys  of  the  Northern  Pacific  railroad 
company ;  that  he  was  fully  committed  to  the  railroad  interests, 
and  that  his  appointment  was  urged  by  railroad  men  in  all 
parts  of  the  country.  By  his  appointment  a  friend  of  these 
corporations  became  a  member  of  the  cabinet,  and  an  import 
ant  ally  is  present  whenever  questions  affecting  their  interests 
are  discussed  in  executive  council. 

A  question  of  the  greatest  importance  to  these  corporations 
was  the  construction  to  be  given  to  the  statutes  of  the  United 
States,  and  especially  the  "Legal  Tender  Act,"  The  first  of 
the  legal  tender  acts  was  passed  July,  1862.  This  was  fol 
lowed  by  other  acts  increasing  the  amounts  of  legal  tender 
issues.  Prior  to  the  passage  of  these  acts,  railroad  corpora 
tions  had  issued  and  sold  many  millions  of  bonds,  and  stipu 
lated  that  both  principal  and  interest  should  be  paid  in  gold. 
Soon  after  the  issue  of  legal  tender  bills  their  value  depreciated, 
and  from  that  time  to  the  present  there  has  been,  and  still  is,  a 
wide  margin  between  their  value  and  coin.  If  these  railroad 
companies  could  pay  their  bond  indebtedness  with  legal  tender 
at  par,  a  saving  of  from  ten  to  fifteen  dollars  could  be  effected 
on  every  hundred  so  paid.  In  the  year  1869,  the  question 
whether  this  act  was  retroactive  in  its  operation  or  effect  was 
presented  to  the  supreme  court.  The  court  was  then  composed 
of  eight  justices.  When  the  case  involving  this  question  was 
presented  to  and  decided  by  the  court,  but  seven  of  the  jus 
tices  were  on  the  bench.  Of  these,  four,  including  the  chief 
justice,  were  of  the  opinion  that  the  statute  did  riot  affect  con- 


184  MONOPOLIES    AND    THE    PEOPLE. 

tracts  made  before  its  passage,  and  decided  that  these  railroad 
companies  must  pay  their  bonds  in  coin  according  to  the  con 
tract.  This  decision  was  not  acceptable  to  this  vast  corporate 
power.  It  was  condemned  by  railroad  men  throughout  the 
country.  The  president  was  approached  on  the  subject,  and 
his  great  influence  was  besought  in  the'  matter.  Four  of  the 
justices  (one-half  of  the  court)  having  held  adversely  to  the 
corporations,  a  full  bench  could  not  reverse  their  decision.  To 
effect  a  reversal,  one  of  the  four  must  change  his  opinion,  or 
the  number  ef  justices  must  be  increased.  The  latter  alterna 
tive  was  decided  to  be  the  more  feasible,  and  the  president 
asked  congress  to  increase  their  number  to  nine.  The  reason 
urged  was,  that  upon  important  questions,  before  a  full  bench, 
the  court  might  be  equally  divided,  and  important  questions 
would  remain  undetermined.  The  railroad  interest  was  fully 
represented  in  the  lobby  at  "Washington,  and  congress  provided 
for  an  additional  justice.  About  this  time  one  of  the  justices 
retired  from  the  bench,  making  a  vacancy,  and  rendering  it 
necessary  for  the  president  to  appoint  two  new  justices.  This 
was  a  grand  opportunity  for  the  railroad  interest.  If  men  who 
were  identified  with  them  could  be  appointed,  the  decision  on 
the  "  Legal  Tender  Act "  could  be  reversed,  and  they  could 
save  from  ten  to  fifteen  millions  of  dollars  on  every  hundred 
million  of  dollars  due  from  them.  Not  only  could  they  save 
this  amount,  but  in  future,  as  the  members  of  the  court  are 
appointed  during  life  or  good  behavior,  they  would  have  no 
apprehensions  of  a  decision  against  their  interest.  At  once 
the  president  was  importuned  to  appoint  William  Strong,  of 
Pennsylvania  —  a  man  who  was  fully  identified  with  them  by 
education  and  employment,  he  being  attorney  for  the  Pennsyl 
vania  railroad  company — and  Joseph  P.  Bradley,  of  New  Jer 
sey,  who  was  also  identified  with  this  interest,  he  being  the 
attorney  of  the  greatest  railroad  corporation  in  that  state. 
Neither  of  these  men  had  any  national  reputation,  but  all  at 
once  the  city  of  Washington,  as  well  as  the  whole  country,  was 
enlightened  as  to  their  great  judicial  worth,  and  railroad  men 
throughout  the  country  were  urging  their  appointment.  It  was 
publicly  announced,  and  not  contradicted,  that  they  were  in 
favor  of  reversing  the  decision  of  the  court  on  the  legal  tender 


THE  MONOPOLISTS  AT  THE  DOOR  OF  THE  WHITE  HOUSE.        185 

act,  and  their  appointment  was  urged  for  this  reason.  This 
influence  controlled  the  president.  These  gentlemen  were 
nominated  by  him,  and  their  appointment  was  confirmed  by 
the  senate  in  1870.  The  decision  on  the  legal  tender  act  was 
reversed,  and  railroad  men  were  happy.  As  we  shall  attempt 
to  show,  when  we  treat  of  the  controlling  influence  of  these 
corporations  upon  the  finances  of  the  country,  this  reversal  was 
most  baneful  to  the  country,  and  detrimental  to  the  best  inter 
ests  of  the  people.  We  do  not  wish  to  be  understood  as  accus 
ing  the  president  of  being  governed  by  improper  motives  in 
the  appointments  of  Messrs.  Strong  and  Bradley  to  the  supreme 
bench ;  but  we  do  mean  that  the  railroad  interests,  by  concert 
of  action,  procured  these  appointments;  it  being  known,  or  at 
least  well  understood,  that  these  appointments  would  insure  a 
reversal  of  the  decision,  as  we  have  recounted,  and  that  by  such 
reversal  their  interests  would  be  greatly  subserved.  £Tor  do 
we  wish  to  be  understood  as  accusing  the  persons  so  appointed 
of  lacking  the  requisite  ability  for  the  honorable  stations  for 
which  they  were  selected,  or  that  their  decisions  were  governed 
by  personal  considerations,  or  that  they  reversed  said  former 
decision  to  specially  subserve  the  interests  of  railroad  corpora 
tions.  "We  have  long  since  come  to  the  conclusion  that  judges 
of  courts,  like  other  men,  are  influenced  by  surrounding  cir 
cumstances;  that  they  are  not  infallible,  and  that  it  is  no  un 
usual  thing  for  the  most  eminent  judges  to  differ  upon  questions 
submitted  for  their  decision.  While  these  decisions  are  hon 
estly  made,  they  are  often  controlled  or  dictated  by  extra  judi 
cial  considerations.  As  we  shall  have  occasion  hereafter  to 
examine  this  subject  when  treating  of  the  intimate  and  con 
trolling  relations  between  these  corporations  and  the  courts  of 
the  country,  we  arc  content  to  leave  the  case  of  their  influence 
with  the  executive  department  to  the  proof  submitted  in  these 
three  appointments  of  Williams,  Bradley,  and  Strong. 


23 


CHAPTER  XX. 


THE  UNITED  STATES  TREASURY  THE  VASSAL  OF  WALL  STREET  — 
STOCK  "OPERATIONS"  EXPLAINED. 

WE  now  beg  to  call  the  reader's  attention  to  the  financial 
operations  of  the  monopolists,  and  the  course  resorted 
to  by  them  to  control  the  finances  of  the  country. 
There  are  now  (January,  1873)  seventy  thousand  one  hun 
dred  and  seventy-eight  miles  of  railroad  completed  in  the  United 
States  and  territories  At  an  expense  of  $35,000  per  mile,  the 
total  cost  of  these  roads  is  $2,456,230,000.  The  cost  as  given 
by  the  companies  is  $3,436,638,749,  or  $48,970  per  mile.  In 
contemplation  of  law,  and  as  reported,  this  cost  is  represented 
by  stock  certificates,  and  is  supposed  to  be  paid  up.  If  the 
roads  cost  but  $35,000  per  mile,  then  $980,408,749,  of  the  stock 
certificates  (that  amount  being  the  excess  over  actual  cost), 
have  only  an  imaginary  value.  In  addition  to  the  stock  certifi 
cates,  representing  the  above  sum  of  $3,456,230,749,  the  rail 
road  companies  have  issued  and  put  upon  the  market  their 
bonds  to  the  amount  of  $2,800,000,000,  thus  making  their 
roads  represent  the  enormous  sum  of  six  billions  two  hundred  and 
thirty-six  millions  six  hundred  and  thirty-eight  thousand  seven  hun 
dred  and  forty-nine  dollars,  or  eighty-eight  thousand  eight  hundred 
and  seventy-two  dollars  per  mile.  The  only  real  value  all  these 
bonds  and  certificates  of  stock  represent,  is  the  railroads. 
These  we  have  put  at  $35,000  per  mile.  Of  course  some  lines 
of  road  exceed  this  valuation;  but  an  examination  of  the  actual 
cost,  as  reported  by  the  engineers  of  the  respective  roads,  will 
show  that  much  the  largest  portion  of  the  roads  have  cost  less. 
Now  let  us  look  at  the  amount  of  the  capital  represented  by  a 
few  of  these  roads,  as  reported  in  the  Railroad  Manual,  and  The 
Stockholder.  The  Chicago,  Burlington,  &  Quincy  is  reputed  to 
be  one  of  the  best  and  most  prudently  managed  roads  in  the 


STOCK  "OPERATIONS"  EXPLAINED.  187 

country.  This  road  represents  in  stock  and  bonds  the  sum  of 
$32,845,880,  or  $43,292  per  mile.  On  the  other  extreme  we 
will  take  the  Central  Pacific,  which  represents  the  sum  of 
$182,208,000,  or  $130,000  per  mile.  The  Atlantic  &  Great 
Western  (an  organization  of  the  K  Y.,  Penn.,  &  Ohio)  repre 
sents  the  sum  of  $109,000,000,  or  $256,000  per  mile.  The 
Cedar  Rapids  &  Missouri  River  railroad  represents  $11,334,000, 
or  $41,000  per  mile.  The  Chicago,  Rock  Island,  &  Pacific 
represents  the  sum  of  $25,717,000,  or  $56,667  per  mile.  The 
Erie  represents  the  sum  of  $112,935,710,  or  $125,750  per  mile. 
The  New  York  Central  &  Hudson  River  railroad  represents 
$104,660,049,  or  $142,656  per  mile.  The  Union  Pacific  repre 
sents  $112,911,512,  or  $109,507  per  mile.  We  give  the  above 
as  samples  of  the  amounts  represented  by  the  different  roads. 
In  some  other  .in  stances  the  stocks  are  "watered"  more,  and 
in  others  less  than  in  the  roads  above  named.  Taking  all  the 
roads  in  the  country,  and  adding  together  the  stock  and  bonds 
issued,  they  represent  $3,800,408,749  more  than  their  actual 
cost.  It  will  not  be  out  of  place  here  to  state  that  the  only 
resource  these  railroad  companies  have  for  the  payment  of 
interest  and  dividends  on  their  stock  and  bonds,  representing 
the  sum  of  $6,236,638,749,  is  the  earnings  of  their  roads. 
While  a  low  rate  of  charges  would  pay  fair  dividends  on  the 
actual  cost  of  the  roads,  yet  in  order  to  pay  dividends  on  their 
"  watered  "  stock,  and  interest  on  their  bonds,  oppressive  and 
extortionate  rates  must  be  charged  and  collected.  The  men 
who  control  these  great  monopolies,  viz  :  Col.  Scott,  who  con 
trols  roads  representing  about  $700,000,000 ;  Vanderbilt,  who 
controls  about  as  great  an  interest;  Drew,  Gould,  and  some 
few  others  of  the  principal  railroad  men,  care  but  little  about 
the  prosperity  of  the  country,  or  the  profits  made  by  their 
roads,  save  as  a  basis  for  their  Wall  street  speculations.  The 
roads  serve  as  a  basis  for  financial  operations.  Like  the  old 
"  wild  cat "  banks  that  issued  bills  without  regard  to  stock  or 
capital,  so  the  roads  controlled  by  these  railroad  monarchs  are 
loaded  with  "  watered  "  stock  and  bonds,  until  their  value  as 
roads  are  destroyed,  and  passengers  and  shippers  are  oppres 
sively  taxed  for  the  purpose  of  giving  some  sort  of  market 
value  to  the  bonds  and  "  watered  "  stock  with  which  Wall 


188  MONOPOLIES   AND   THE    PEOPLE. 

street  is  flooded.  The  issuing  of  stock  certificates  goes  on, 
and  will  continue  as  long  as  dividends  can  be  declared.  At 
the  present  time  the  railroads  of  the  country  collectively  rep 
resent  about  three  times  their  value,  or  actual  cost.  If  the 
people  were  not  taxed  on  "  watered  "  stock  and  bonds,  dishon 
estly  issued,  the  rates  charged  for  transportation  would  be  but 
little  more  than  one-third  the  figures  of  the  present  tariff.  The 
vast  wealth  claimed  by  railroad  corporations  is  about  two- 
thirds  pure  fiction,  and  but  for  the  extortions  practiced  upon 
the  public,  their  stocks  and  bonds,  beyond  the  value  of  their 
roads,  would  not  be  considered  in  market ;  but  so  long  as  in 
terest  at  the  rate  of  six,  eight,  and  ten  per  cent  can  be  drawn 
from  the  public,  they  are  marketable.  These  stocks  and 
bonds  are  owned  or  controlled  by  the  men  who  not  only  man 
age  the  railroad  interests,  but  also  the  bond  and  stock  market 
of  the  country.  Being  the  leading  spirits  among  Wall  street 
brokers,  using  their  railroads  for  the  purpose  of  aiding  in  their 
stock-jobbing  speculations,  by  compelling  them  to  earn  inter 
est  on  all  of  the  worthless  stocks  and  bonds  they  put  upon  the 
market,  a  fictitious  value  is  given  to  them.  Having  their 
principal  place  of  business  in  the  commercial  metropolis  of  the 
country,  being  able  whenever  their  interests  demand  it  to 
"  corner"  the  money  of  the  country,  it  could  be  hardly  ex 
pected  that  the  treasury  department  of  the  government  would 
escape  their  control.  If  a  conflict  should  arise  between  the 
secretary  of  the  treasury  and  these  vast  monopolies,  the  ques 
tion  of  which  side  would  come  off  victorious  could  not  be 
doubtful. 

The  circulating  medium  of  the  country  is,  in  legal  tender 
notes,  1356,000,000.  That  of  national  banks,  excluding  their 
reserves,  is  less  than  $300,000,000.  This  currency  is  scattered 
over  the  country — a  small  portion  of  it  in  foreign  countries. 
No  coin  is  in  circulation,  most  of  it  being  locked  up  by  Wall 
street  brokers,  in  the  interest  of  these  railroad  corporations. 
Many  of  the  national  banks  of  the  country  are  owned  by  rail 
road  men.  In  addition  to  the  immense  earnings  of  the  rail 
roads,  which  under  the  present  system  are  concentrated  in  the 
city  of  New  York,  almost  the  entire  amount  of  stock  and 
bonds  issued  by  railroad  companies  is  either  owned  or  repre 


189 

sented  in  Wall  street,  and  as  occasion  demands  is  put  upon  the 
market.  Thus  the  whole  of  this  corporate  influence  can  be 
used  at  any  time  in  a  financial  conflict  with  the  government. 
It  has  been  and  is  still  being  used  against  the  government. 
Under  the  revenue  laws  of  the  country,  import  duties  are  paid 
in  coin.  A  part  of  the  sum  thus  realized  is  applied  in  pay 
ment  of  the  national  debt.  There  is  no  good  reason  why  the 
secretary  of  the  treasury  should  not  apply  this  sum  directly  in 
payment  of  government  bonds.  Such  a  policy  would  tend 
toward  the  resumption  of  specie  payment,  making  the  money 
of  the  people  of  equal  value  with  that  used  by  the  government. 
This  would  not  suit  railroad  companies.  So  long  as  a  margin 
can  be  preserved  between  coin  and  currency  (and  for  their 
purposes  the  wider  the  better)  under  the  decision  of  the 
supreme  court  they  can  discharge  their  bond  indebtedness, 
contracted  to  be  paid  in  gold,  with  depreciated  paper  at  par, 
and  save  the  margin.  In  order  that  a  margin  may  be  contin 
ued,  instead  of  making  direct  payment  of  government  bonds 
to  the  direct  holders  thereof,  the  secretary  of  the  treasury  is 
required  to  sell  gold  in  New  York,  and  purchase  or  liquidate 
the  bonds  with  the  proceeds  of  these  sales.  It  is  noticeable  in 
all  cases  of  the  sale  of  coin,  that  Wall  street  brokers  are  the 
purchasers,  and  usually  at  less  than  the  quoted  market  value. 
By  this  means  the  interests  of  these  railroad  managers  are 
subserved  in  more  than  one  particular.  Their  brokers  pur 
chase  and  corner  the  coin  sold,  and  prevent  it  going  into  circu 
lation,  and  the  margin  between  coin  and  currency  is  preserved. 
The  day  for  the  resumption  of  specie  payment  is  kept  in  the 
distant  future.  The  importing  merchant  must  buy  gold  of  the 
brokers  (who  are  the  railroad  managers)  at  its  market  value,  to 
pay  government  duties  on  their  imports,  and  thus  the  compa 
nies  make  the  difference  between  the  price  paid  and  the  price 
obtained.  When  some  favorite  railroad  stocks  are  to  be  forced 
upon  the  market,  these  brokers,  who  can  do  so  at  pleasure, 
supply  the  money  market,  and  sell  the  stocks  at  a  large  profit ; 
and  when  the  object  is  to  reduce  the  value  of  stocks,  they  with 
draw  from  circulation  a  sufficient  amount  of  the  currency  to 
cause  a  stringency  in  the  market,  until  their  end  is  accom 
plished.  Controlling  absolutely  the  gold  market,  as  well  as 


190  MONOPOLIES   AND   THE    PEOPLE. 

the  secretary  of  the  treasury  in  his  financial  operations,  they 
have  only  to  corner  a  few  millions  of  currency  to  make  the 
entire  commerce  of  the  country  subserve  their  special  pur 
poses.  With  all  of  their  interests  united,  all  their  business 
concentrated  in  Wall  street  and  controlled  by  six  or  eight 
leading  men,  they  regulate  the  finances,  fix  the  value  of  the 
produce  of  the  country,  and  hold  the  producers  of  the  great 
west  in  a  state  of  vassalage  whieh  has  no  precedent,  even  in 
despotic  countries.  The  secretary  of  the  national  treasury, 
who  is  supposed  to  control  the  financial  department  of  govern 
ment,  is  in  fact  the  servant  of  these  men,  and  whatever  policy 
is  beneficial  to  their  interests  must  be  adopted  by  the  govern 
ment.  To  the  uninitiated  it  may  appear  impossible  for  a  few 
men  in  New  York  to  exercise  a  controlling  influence  over  the 
financial  policy  of  the  nation,  but  if  we  remember  that  all  the 
wealth  of  these  corporations,  actual  and  fictitious,  is  concen 
trated  in  that  city,  or  controlled  by  men  doing  business  there, 
and  that  an  immense  stream  of  money,  received  by  these  cor 
porations  from  passengers  and  shippers,  is  constantly  flowing 
into  Wall  street  from  all  parts  of  the  country,  we  can  under 
stand  their  power  and  appreciate  their  influence.  The  fact 
that  it  requires  more  than  twice  as  much  money  to  pay  the  in 
terest  on  the  bonds  issued  by  these  corporations,  and  dividends 
on  their  stock,  as  would  pay  the  interest  on  the  national  debt, 
is  significant.  When  private  corporations  combine  their  inter 
ests  and  become  so  powerful  as  to  require  an  annual  expendi 
ture  of  more  than  twice  the  amount  expended  by  the  United 
States  government,  and  when  their  revenues  more  than  quad 
ruple  those  of  the  government,  they  must  of  necessity  exercise 
a  controlling  influence  over  the  financial  and  industrial  inter 
ests  of  the  country.  This  fact  is  now  being  demonstrated  by 
a  combination  of  the  railroad  corporations  of  the  country,  as 
the  people  know  to  their  cost. 

It  will  be  proper  here  to  detail  the  modus  operandi  of  these 
railroad  companies  at  their  headquarters  in  Wall  street.  We 
read  of  large  operations  in  stocks  and  bonds,  as  well  as  in 
gold,  and  are  apt  to  conclude  that  sales  and  purchases  are 
made  by  regular  transfers  in  a  fair  and  legitimate  manner. 
Such  is  not  the  case.  Among  the  initiated  sales  are  pure  fie- 


STOCK    "  OPERATIONS  "    EXPLAINED.  191 

tion  in  many  cases,  and  in  others  it  is  but  purchasing  or  selling 
the  chance  of  an  advance  or  decline  in  the  price  of  stocks, 
bonds,  or  coin.  To  call  these  transactions  by  their  right 
name  —  they  arc  nothing  but  gambling.  If  legitimate  sales  are 
made,  it  is  with  outside  parties,  or  to  the  uninitiated.  The 
corporation  rings  congregated  in  Wall  street,  calling  them 
selves  bankers  and  brokers,  sell  to,  or  purchase  stocks  from, 
each  other,  without  delivery  or  even  payment,  all  the  money 
passing  between  the  seller  and  purchaser  being  the  margin  be 
tween  the  price  agreed  to  be  paid  and  the  market  reports  at 
the  time  fixed  for  delivery.  To  illustrate,  let  us  suppose  that 
certain  railroad  stock  is  quoted  at  ninety-three  cents,  or  seven 
per  cent  below  par.  A,  who  believes  that  there  will  be  no 
further  rise  in  the  price,  but  that  the  same  will  decline,  offers 
B  $10,000  of  this  stock  at  ninety-one  cents,  to  be  delivered  in 
three  days.  I^e  has  no  stock,  but  believing  it  will  decline  to 
ninety  cents  or  less,  within  the  time  fixed  for  delivery,  he  ex 
pects  to  buy  at  a  still  lower  rate  than  he  has  agreed  to  sell,  or 
to  borrow  it  for  a  consideration  if  the  decline  does  not  meet 
his  anticipations.  Or  he  will  settle  his  contract  with  B  by 
paying  him  the  difference  between  the  market  value  at  the 
time  of  delivery  and  the  price  at  which  he  agreed  to  sell. 
The  same  process  is  gone  through  if  the  sale  is  made  with  the 
expectation  of  the  stock  advancing  in  price.  A  agrees  to  pur 
chase  of  B  four  days  after  the  date,  $15,000  in^tockat  ninety- 
five  cents,  being  an  advance  of  two  per  cent  on  the  market 
price  on  the  day  of  sale.  The  stock  does  not  advance,  and  at 
the  time  for  delivery  A  pays  B  the  margin  between  two  cents 
on  the  dollar,  and  the  market  price.  No  stock  has  passed  be 
tween  them.  It  was  a  fight  between  a  "  bull  "  and  a  u  bear  " 
for  the  margin. 

Nearly  all  of  the  financial  operations  of  Wall  street  brokers 
are  of  a  like  character.  Some  of  them  involve  immense 
amounts.  One  man  makes  a  fortune,  and  another  becomes 
bankrupt  in  a  day.  Wall  street  is  the  place  where  men  of  all 
creeds  and  nationalities  meet  to  engage  in  this  kind  of  gam 
bling  traffic.  Men  run  about  the  streets — into  the  "gold  room," 
the  "  clearing  house,"  their  faces  flushed,  their  whole  person 
excited,  their  appearance  "  distorted,  hair  dishevelled,"  their 


192  MONOPOLIES    AND    THE     PEOPLE. 

voices  hoarse,  all  intent  on  making  money,  not  in  a  legitimate 
way,  but  by  the  chance  of  a  rise  or  fall  in  gold,  bonds,  and 
stock.  Let  us  see  some  of  the  terms  used  by  them  in  their 
business.  The  rings  operating  in  stocks  are  divided  into  two 
classes  —  "  bulls  "  and  "  bears."  They  have  the  advantage  of 
the  real  bear  and  bull  in  this :  they  can  change  from  one  to 
the  other  as  the  occasion  serves.  Daniel  Drew,  Col.  Scott, 
and  Commodore  Vanderbilt  can  be  bulls  to-day  and  bears  to 
morrow,  as  their  interests  dictate.  The  object  of  the  bulls  is  to 
advance  the  price  of  stocks  ;  that  of  the  bears  to  depreciate. 
They  thrive  most  when  the  people  generally  are  in  want,  or 
when  some  public  calamity  unsettles  commerce.  They  often 
times  devise  means  to  .bring  on  a  panic,  that  they  may  break 
the  market  and  buy  favorite  stocks  at  low  rates.  They  do  not 
care  how  much  the  community  may  suffer,  or  how  many  men 
engaged  in  legitimate  business  may  be  ruined,  provided  their 
own  interests  are  served.  We  take  from  Appleton's  Journal  a 
description  of  some  of  their  terms,  and  their  manner  of  doing 
business  :  — 

"  The  terms,  i  long'  and  'short'  are  of  respective  application 
to  the  '  bull '  and '  bear '  parties.  The  bulls  are  always '  long '  of 
stock,  and  the  bears  are  always  '  short.'  The  speculator  who  has 
stock  on  hand  which  he  bought  with  expectation  of  selling  at 
higher  prices,  is  on  the  bull  side,  and,  in  the  parlance  of  the  street, 
is  '  long.'  A  bear  seldom  has  stock  on  hand.  His  business  is  to 
sell  '  short ' — that  is,  to  sell  property  which  he  has  not  got,  in 
tending  to  buy  and  deliver  when  prices  are  lower.  Generally, 
the  stock  is  to  be  delivered  the  day  after  it  is  sold,  but  quite 
often  the  bear  does  not  buy  it  for  a  month  or  two,  or  three 
months.  How,  then,  can  he  deliver  it  in  twenty-four  hours  ? 
By  borrowing  it  from  another  person.  There  is  in  Wall  street 
a  regular  system  of  borrowing  stock.  The  borrower,  who 
represents  the  speculator,  procures  the  stock  from  another 
broker,  to  whom  he  gives  a  check  as  security  for  the  stock 
borrowed.  This  transaction  is  good  for  one  day  only,  but  it 
may  be  renewed  for  the  next  day,  and  then  the  next,  and  thus 
several  weeks  may  pass  before  the  stock  is  really  purchased 
for  delivery.  Meantime  the  seller,  if  he  belongs  to  u  clique,  or 
'  pool,'  is  trying  every  day  to  depress  prices,  in  order  that  he 


STOCK   i4  OPERATIONS"  EXPLAINED.  193 

may  buy  the  stock  at  a  lower  tigure  than  that  at  which  he  sold 
it.  This  is  the  operation  known  as  '  hammering  the  market,' 
and  a  very  exciting  one  it  sometimes  is.  But  the  bears  are 
sometimes  badly  '  squeezed,'  and  then  they  make  a  rush  to 
;  cover.'  When  the  bulls  learn  that  there  is  a  large  '  short ' 
interest  in  a  particular  stock,  they  put  their  heads  together  and 
get  up  a  l  corner/  When  a  stock  is  said  to  be  '  cornered,'  the 
meaning  is  that  it  is  controlled  by  a  clique.  The  clique  hold 
enough  of  it  to  control  the  market,  and  -exact  such  terms  as 
may  be  desired.  An  upward  movement  is  suddenly  devel 
oped,  and  then  the  bears,  who  have  sold  '  short/  in  expectation 
of  lower  prices,  become  alarmed,  and  begin  to  buy.  In  the 
majority  of  cases,  the  men  who  work  the  advance  are  the  very 
ones  who  bought  what  the  bears  sold,  and  they  are  now  sell- 
isgit  to  them  at  higher  figures  for  delivery  back  to  themselves. 
1  Twisting '  is  the  process  of  making  the  bears  pay  high  prices 
for  what  they  probably  sold  at  low  prices,  and  '  covering '  is 
the  operation  of  buying  stock  to  close  '  short '  contracts.  Once 
in  a  while  a  stock  is  so  closely  i  cornered  '  that  it  can  only  be 
borrowed  at  an  enormous  interest  for  a  day's  use  —  perhaps  at 
a  rate  that  exceeds  a  thousand  per  cent  per  annum.  An 
operation  of  this  sort  is  the  worst  squeeze  of  all ;  and  it  is  not 
to  be  wondered  at,  that,  as  the  gentlemen  of  the  stock  ex 
change  say,  the  bears  generally  squeal  under  it.  One  shrewd 
manipulator  of  stock  is  known  to  have  cleared  $50,000  in  one 
day,  by  loaning  a  fancy  stock  that  he  had  '  cornered.'  But  the 
same  gentleman  sometimes  gets  into  a  '  corner '  prepared  by 
others.  It  is  commonly  understood  that  he  was  fleeced  to  the 
amount  of  $2,000,000  during  the  lively  *  Northwest. '  gale  a  few 
weeks  since.  '•  Puts  '  and  '  calls '  are  terms  of  more  than  ordi 
nary  difficulty  for  the  uninitiated  to  understand.  A  proposes 
to  '  put '  to  B,  that  is,  to  deliver  to  him,  a  certain  amount  of  a 
certain  stock  at  a  certain  time,  at  a  price  agreed  upon  when 
the  contract  is  made,  and  gives  B  a  bonus  of  one,  two,  or  three 
per  cent,  as  the  case  may  be,  for  the  privilege.  This  is  a  'put.' 
If  the  stock  does  not  decline  in  value  to  an  amount  exceeding 
the  sum  given  to  B,  A  cannot  make  anything  by  the  transac 
tion  ;  and,  unless  he  chooses  to  deliver  the  stock,  he  is  not 
obliged  to  do  so.  If  it  falls  more  than  the  amount,  A  makes  a 
24 


194  MONOPOLIES    AND    THK    PEOPLE. 

good  profit,  for  B,  having  accepted  the  bonus,  is  bound  to  take 
it,  even  though  it  may  be  selling  five  or  ten  cents  below  the 
price  at  which  he  agreed  to  take  it.     A  '  call '  is  pretty  much 
the  same  thing,  with  this  difference  :  A  gives  B  a  hundred  or 
a  thousand  dollars,  or  whatever  sum  may  be   agreed  upon, 
for  the  privilege  of 'calling '  from  B  a  certain  amount  of  stock 
within  a  given  number  of  days.     If  it  advances,  A  may  '  call ' 
it  and  make  money.     If  it  declines,  he  need  not  '  call '  it,  but 
of  course  the  bonus  lie  gave  to  B  is  forfeit.     There  are  times 
when  the  business  in  :  puts '  and  '  calls '  is  quite  large,  and  a 
great  deal  of  money  is  made  by  it :  but,  like  all  other  kinds  of 
speculation,  it  is  dangerous  to  the  inexperienced.     '  Scoop'  is 
a  term  less  familiar  to  the  public  than  any  of  the  foregoing. 
This  '  scoop  game     is  a  very  common  one,  and  is  played  in 
this  way  :    A  clique  of  speculators,  let  us  suppose,  wish  to  get 
possession  of  a  good  deal  of  some  particular  stock,  which  they 
have  reason  to  believe  will  soon  advance   in  price ;     but  of 
course  they  want  to  get  it  cheap,  and  they  accomplish  their 
object  by  starting  a  break  in  the  stock.     This  is  done  by  offer 
ing  it  at  IOWT  figures.     They  instruct  their  brokers  to  offer 
small  quantities  under  the  market  price,  and  to  keep  on  offer 
ing  lower  and  lower,  until  other  holders  of  the  same  stock  who 
are  not  in  their  confidence  become  alarmed,  arid  sell  out  at  the 
best  price  they  can  get.     In  the  meantime  the  clique  have 
other  brokers  buying  all  the  stock  that  is  offered,  and  thus 
they  get  possession   of  a  large  amount  of  stock  at  low  prices, 
which  they  can  probably  sell,  a  few  days  later,  at  a  large  profit. 
This  'scoop  game '  is  one  of  the  most  profitable  that  the  Wall 
street  gentlemen  play.     The  process  of  *  washing '  —  a  very 
good  one  in  its  ordinary  sense  —  is  often  employed  in  Wall 
street.     *  Washing  '  is  a  peculiar  operation  there,  very  peculiar 
indeed,  and  the  outsiders  ought  to  keep  as  far  as  possible  from 
the  suds.     A  clique  is   as  necessary  to  it  as  to  the  '  scoop  ' 
business.     There  is  a  stock  on  the  list,  for  instance,  that  the 
public  persist  in  letting  alone,  and  the  holders  of  it  want  to 
stir  up  some  excitement  in  this  stock,  and  induce  the  public  to 
buy  it.     How  do  they  proceed  ?     Their  plan  is  quite  simple : 
Several  brokers  —  let  us   suppose    four  —  are    employed    to 
'  wash '  the  stagnant  stock.     No.  1  offers  to  sell ;     No.  2  takes 


STOCK  "OPERATIONS"  EXPLAINED.  195 

what  is  offered.  No.  3  wants  to  buy ;  No.  4  sells  him  all  he 
wants.  This  is  kept  up  for  a  few  days,  the  price  rising  steadi 
ly  as  the  '  wash  '  proceeds  ;  but  not  one  share  is  actually  sold. 
The  innocent  outsider,  supposing  these  fictitious  transactions 
to  be  real,  and  thinking  there  is  a  .chance  to  make  a  turn  in 
the  stock,  goes  in  as  a  buyer  himself.  Ten  to  one  he  will 
never  get  as  much  for  the  stock  as  he  paid,  for  it  falls  stagnant 
when  the  speculators  have  got  it  off  their  hands.  '  Coppering'  is  a 
term  recently  introduced,  but  very  well  understood  in  the  street. 
It  means  operating  in  a  direction  contrary  to  that  of  another. 
For  example,  one  buys  a  particular  stock,  believing  that  it  will 
advance :  another  man,  observing  that  the  first  has  not  been 
lucky  in  his  operations,  sells  this  particular  stock,  believing  it 
will  decline.  Or  the  first  may  sell  a  particular  stock  '  short," 
and  the  second,  calculating  on  the  other's  ill  luck,  will  buy. 
This  sort  of  speculation  is  carried1  on  only  among  the  smaller 
class  of  operators,  and  may  be  set  down  as  sheer  gambling.  A 
1  straddle '  is  a  double  privilege,  entitling  the  purchaser  to 
either  '  put  *  or  *  call '  a  stock.  The  bonus  is  generally  the 
amount  paid  for  the  single  privilege  of  *  put'  or  i  call.'  A 
1  margin '  is  the  money  deposited  with  the  broker  through 
whom  the  stocks  are  purchased,  as  a  security  against  a  sudden 
depreciation.  The  amount  is  generally  about  ten  per  cent 
of  the  par  value  of  the  stock.  '  Margins  '  are  the  rocks  on 
which  many  adventurers  on  the  uncertain  waters  of  speculation 
are  utterly  wrecked.  'Carrying'  means  holding  stock  in  an 
ticipation  of  higher  prices.  Often  a  stock  is  i  carried  '  for  six 
months,  but  generally  the  time  is  not  more  than  two  months, 
and  frequently  not  more  than  a  week.  Quick  turns  is  the  rule 
of  a  majority  of  speculators.  '  Watering'  is  the  operation  of 
suddenly  increasing  the  capital  stock  of  a  company.  Wall 
street  was  thoroughly  familiarized  with  it  by  the  reckless  Erie 
managers,  who  earned  a  notoriety  that  certainly  honorable  men 
would  not  covet.  It  is  very  dangerous  to  the  holders  of  the 
stock  previously  in  the  market." 

The  foregoing  discloses  the  manner  in  which  these  corpora 
tions,  through  their  managers,  play  the  double  role  of  operating 
railroads  and  operating  in  Wall  street.  To  outsiders  there 
seems  to  be  but  little  difference  between  what  is  known  even7- 


196  MONOPOLIES    AND    THE    PEOPLE. 

where  as  downright  gambling,  and   Wall  street    operations. 
The  gambler  who  risks  his  half-dollar  on  a  game  at  cards  is 
punished  for  violating  the  law ;     but  these  Wall  street  opera 
tions,  which  are  but  games  of  chance,  are  dignified  with  the 
name  of  "  speculations.'"     Honorable  men,  reputed  Christian 
men  —  Jew  and  Gentile  —  all   engage  in  them.     While  they 
prey  upon  the  producer  in   operating  their  roads,   they  prey 
upon  the  unsuspecting  public  in  their  stock  operations ;     and, 
by  way  of  variety,  occasionally  devour  each  other.     Control 
ling,  as  they  do,  the  means  of  transporting  the  products  of  the 
country  to  market,  as  well  as  the  coin  of  the  country  and  the 
stock  market  in   Wall  street,  they  are  prepared  to  get  up   a 
"corner"  on  any  marketable  commodity — upon  the  currency  of 
the  country,  and  upon  gold.     In  fact,  they  may  have  all  the  coin 
of  the  country  under  their  control,  save  the  amount  held  in  the 
treasury  of  the  government.  The  monthly  reports  of  the  secretary 
of  the  treasury  show  that  while  there  was  the  amount  of  about 
$100,000,000  in  the  treasury  one  year  ago,  there  is  but  about 
two-thirds  of  that  amount  nowr.  The  reports  of  sales  show  that 
these  Wall  street  operators  have  cornered  about  one-third  of 
the  gold  held  by  government  within  the  last  year.     This  cor 
nering  process  goes  on,  and  is  now  reduced  to  a  system.    Sup 
pose  the  secretary  sells,  in  the  month  of  January,  1873,  in  New 
York,  86,000,000  in   coin.     It  is  all  bought  and   cornered   by 
the  brokers.     The  importing  merchants  require  but  $3,000,000 
during  the  same  month  to  pay  duties.     The  difference,  S3, 000.- 
000,  is  locked  up  in  Wall  street.     This  transaction,  in  a  greater 
or  less  degree,  is  repeated  each  month,  and  while  the  amount 
of  gold  in  the  treasury  is  decreasing,  that  controlled  by  rail 
road  brokers  is  increasing.     The  treasury  weakens,  and   these 
gambling   rings  and  combinations  strengthen.     It  is   only  a 
question  of  time,  under  the  present  system,  when  the  treasury 
will  be  obliged  to  replenish  itself  by  purchases  from  the  bro 
kers.     So   completely  are  the  finances  of  the  country  under 
their  control,  the  secretary  of  the  treasury  is  obliged  to  keep  a 
large  surplus  of  coin  on  hand  to  meet  emergencies.      In   order 
to  prevent   a   panic,  he   is   obliged   to  sell   coin    monthly,  and 
whether  the  financial  condition  of  the  treasury  or  of  the  coun 
try  will  warrant  it  or  not,  he  is  obliged  to  pay  some  portion  of 


STOCK  "OPERATIONS"  EXPLAINED.  197 

the  national  debt  as  an  excuse  tor  selling  coin.  These  corpo 
rate  rings  are  laboring  to  control  the  gold  'jf  the  country,  and 
thus  prevent  the  resumption  of  specie  paymenc.  To  make  re 
sumption  impossible,  they  "  bull  "  gold  as  well  as  stock,  and 
thus  force  gold  sales  by  the  secretary.  The  sooner  they  can 
deplete  the  national  treasury,  the  sooner  can  they  become 
masters  of  the  situation.  They  now  hold  the  secretary  of  the 
treasury  at  their  mercy,  and  compel  him  to  serve  their  selfish 
purposes.  When  they  achieve  their  final  victory  (and  achieve 
it  they  will  under  the  present  system)  they  can,  without  hin 
drance,  fix  the  value  of  gold,  and  extort  from  the  people  and 
the  government  just  such  premiums  as  they  please  to  ask  for 
it.  They  can  render  specie  payment  impossible,  and  thus 
reap  the  full  benefit  of  the  "Legal  Tender  Decision.'* 


CHAPTER   XXI. 


HOW  WALT,  STREET  BUILDS  RAILROADS — A  HOT-BED  OF  CORRUPTION. 

WE  have  attempted  to  show  the  controlling  influence  of 
these  railroad  corporations  upon  the  legislative  and 
executive  departments  of  the  government,  and  have 
placed  before  the  reader  the  danger  to  republican  institutions 
and  liberties  of  the  people,  resulting  from  this  influence.  In 
this  connection  it  remains  for  as  to  treat  of  the  influence  of 
these  corporations  upon  the  judiciary  of  the  country.  Before 
proceeding  to  this  branch  of  the  subject  we  desire  to  direct 
the  reader's  attention  to  some  alarming  facts  respecting  these 
corporations,  hitherto  only  alluded  to,  and  the  disastrous  re 
sults  which  must  follow  their  present  management. 

We  have  already  shown  that  railroads,  in  stocks  and  bonds, 
represent  capital  to  about  three  times  their  actual  value,  and 
that  because  of  this,  the  people  are  compelled  to  pay  rates  of 
transportation  ruinous  to  the  agricultural  interest  of  the  coun 
try.  We  have  shown  the  relations  existing  between  the  men 
who  manage  these  corporations  and  the  Wall  street  gamblers, 
with  their  manner  of  issuing  and  putting  upon  the  market 
fictitious  or  "  watered  "  stock.  The  idea  generally  prevailing 
is,  that  the  enormous  wealth  which  these  monopolies  repre 
sent  is  real.  In  fact,  about  two-thirds  of  it  is  pure  fiction. 
It  is  manufactured,  and  by  reckless  and  dishonest  men,  who 
stop  at  nothing,  and  who  care  not  for  the  prosperity  of  the 
•  nation,  or  of  the  government,  when  their  own  interests  are  in 
view.  They  drain  the  country  of  its  wealth,  concentrate  it  in 
Wall  street,  and  there  spend  it  in  stock  and  gold  gambling : 
and  this  hot-bed  of  corruption  which  has  no  counterpart,  save 
in  the  infernal  regions,  has  raised  such  a  combination  through 
out,  the  country  as  to  control  the  whole  financial  policy,  and 
compels  even  the  secretary  of  the  treasury  to  yield  to  its  de- 


HOW    WALL    STREET    BUILDS    RAILROADS.  199 

4 

mands.  The  public  and  private  wealth  of  the  country  is  be 
ing  rapidlv  destroyed  by  these  corporations,  and  all  depart 
ments  of  government  are  compelled  to  do  them  homage. 

We  have  shown  that  the  railroads  of  the  country  are  in  the 
hands  of  unscrupulous  men,  whose  sole  interest  in  transpor 
tation  is  the  money  it  can  extort  from  the  public.  This  must 
be  so  from  the  manner  in  which  roads  are  built  and  controlled. 
Formerly  railroads  were  paid  for  from  the  proceeds  of  paid-up 
capital.  The  men  who  became  stockholders  were  interested 
in  making  good  and  cheap  roads,  and  in  operating  them 
honestly  and  economically.  These  men  were  free  from  the 
scandal  of  watering  stock,  issuing  and  selling  bonds  to  an  un 
limited  amount,  and  were  not  partners  in  the  iniquitous  Wall 
street  speculations  which  have  become  the  bane  of  the  coun 
try.  In  Appleton's  Railroad  and  Steamboat  Companion,  pub 
lished  in  1849,  we  find  a  statement  of  the  cost  of  railroads 
then  constructed.  The  roads  then  constructed  were  supplied 
with  rails  that  cost  less  than  those  now  in  use,  but  the  road 
beds  in  most  cases,  in  the  eastern  states,  cost  much  more  than 
those  constructed  at  more  recent  periods.  Some  of  them  were 
lines  of  solid  masonry,  supporting  lateral  or  string  timbers, 
throughout  the  entire  length,  and  the  rails  were  placed  upon 
these  timbers.  Others  were  constructed  upon  the  plan  now 
in  use,  costing  less  than  half  the  cost  of  the  others.  The  roads 
in  the  eastern  states,  built  upon  the  plan  first  named,  cost  as 
follows :  In  Massachusetts  and  the  other  New  England  states, 
$24,000  per  mile.  In  New  York,  §26,000.  In  New  Jersey 
and  Pennsylvania,  $40,000.  In  Michigan,  Ohio,  and  Indiana, 
where  the  roads  were  built  upon  the  modern  plan,  $11,000. 
Of  course,  the  small  cost  in  these  last  named  states  is  attribu 
table  in  part,  to  the  nature  of  the  country  through  which  they 
pass.  The  facilities  for  building  railroads  at  the  present  time 
more  than  counterbalance  the  additional  cost  of  iron,  and  no 
good  reason  can  be  shown  why  the  actual  cost  of  roads  at  this 
time  should  exceed  that  of  the  more  substantially  constructed 
roads  built  thirty  or  forty  years  ago.  But  at  the  present  time 
the  building  of  railroads  from  the  proceeds  of  paid-up  stock 
is  not  generally  practiced.  A  different  rule  prevails.  The 
general  rule  now  is  to  get  grants  of  land,  government,  state, 


200  MONOPOLIES    AND    THE    PEOPLE. 

«. 

and  'local  subsidies,  in  amounts  sufficient  to  organize  a  com 
pany  and  commence  the  work  of  construction,  then  to  issue 
and  sell  bonds,  secured  by  mortgage  upon  the  roads  to  be  con 
structed,  and  from  the  proceeds  construct  the  roads.  Then 
stock  certificates  representing  paid-up  capital  are  issued,  when 
in  fact,  all  that  has  been  paid  is  the  local  subscriptions  ob 
tained  by  managers  from  persons  located  along  the  lines  of 
roads.  The  roads  having  been  built  on  borrowed  capital,  the 
stock  represents  nothing  but  an  opportunity  for  dishonest 
speculation.  A  "  railroad  '"'  now  means,  to  a  large  majority  of 
those  who  are  engaged  in  projecting  and  creating  it,  nothing 
but  a  fraudulent  device  for  extorting  money  from  the  public 
under  cover  of  developing  the  country  and  rendering  great 
public  benefit  to  the  nation.  After  the  roads  are  built,  the 
men  who  have  built  the  same,  and  issued  arid  sold  the  bonds, 
issue  to  themselves  certificates  of  stock,  no  part  of  which  they 
have  paid  up,  and  go  into  Wall  street  to  unload,  that  is,  to 
sell  their  stock.  If  it  be  in  good  demand  it  will  bear  "  water 
ing.''  More  stock  is  issued  and  sold,  and  by  this  process  men 
who  were  worth  nothing,  but  who  were  so  fortunate  as  to  get 
the  control  of  certain  railroad  companies  without  having  in 
vested  to  the  amount  of  a  dollar,  suddenly  become  immensely 
rich.  The  value  of  the  road  to  those  who  have  paid  up  their 
stock,  but  are  not  included  in  the  ring,  is  destroyed :  the  road 
is  loaded  with  a  debt  that  destroys  its  value.  This  new  method 
of  construction  meets  with  favor  among  a  large  class  of  men 
in  all  parts  of  the  country,  who  have  combined  to  aid  each 
other.  All  that  is  lacking  on  their  part  to  take  absolute  con 
trol  of  the  whole  country  and  government  is  a  consolidation 
of  all  the  railroads  of  the  country  under  one  •management. 
At  this,  time,  six  or  eight  great  combinations,  with  a  half 
dozen  men  at  their  head,  manage  the  railroad  interest  of  the 
country.  They  are  extending  their  power  and  it  may  not  be 
long  until  all  will  be  consolidated  in  one,  which  would  give 
this  monopoly  absolute  control,  not  only  of  the  markets,  but 
of  the  whole  legislation  of  the  country  in  matters  affecting 
their  interests.  "  With  packed  legislatures,  state  and  national ; 
with  paid  or  intimidated  judges,  and  with  civil  service  of  sev 
eral  thousand  cunning  clerks,  and  able-bodied  brakemen,  con- 


fiOW    WALL    STREET    BUILDS    RAILROADS.  201 

ductors,  and  switch  tenders,  they  would  be  in  that  position 
most  to  be  dreaded  by  all  lovers  of  liberty  — a  powerful  and 
enormously  rich  corporation,  surrounded  by  a  weak,  timid, 
and  helpless  public.  While  we  were  still  engaged  in  singing 
paeans  over  the  glorious  institutions  of  our  happy  country,  we 
would  suddenly  find  that  our  institutions  had  disappeared,  and 
that  we  had,  riveted  around  our  necks,  a  worse  despotism 
than  we  ever  lamented  for  the  down-trodden  of  other  lands. 
This  is  really  no  imaginary  picture  as  all  will  see  who  remem 
ber  the  stronghold,  absolutely  inaccessible  to  the  law,  which 
Fisk  and  Gould  erected,  and  for  a  time  maintained  in  New 
York ;  or  the  military  operations  of  the  employes  of  the  Erie  on 
the  Susquehana  road,  and  who  have  followed,  with  any  atten 
tion,  the  helpless  struggles  of  the  government  of  the  United 
States  —  formerly  supposed  quite  able  to  take  care  of  itself — 
in  the  foul  toils  of  the  Union  Pacific  railroad.  These  corpora 
tions  foreshadow  what  must  follow  when  a  perfect  consolida 
tion  is  effected.  Now  at  non-competing  points  they  extort 
from  shippers  such  enormous  rates  for  transportation  as  ab 
sorb  almost  the  entire  value  of  the  farm  products ;  while  from 
points  at  which  there  are  competing  lines  of  road  they  will 
carry  at  greatly  reduced  rates.  They  will  charge  no  more  for 
carrying  freight  one  thousand  miles  from  a  point  where  there 
is  a  competing  road,  than  for  carrying  one-tenth  of  that  dis 
tance,  where  there  is  no  competition.  When  they  have  the 
power,  and  hold  the  shipper  at  their  mercy,  they  virtually  rob 
him.  What  is  true  of  their  course  where  there  is  no  compe 
tition,  will  become  the  universal  rule,  when  a  perfect  consoli 
dation  of  the  whole  railroad  interest  is  effected.  Add  to  this 
the  control  of  the  finances  of  the  country  (which  they  are  now 
rapidly  securing)  and  their  rule  becomes  absolute  over  the 
whole  people,  and  all  departments  of  the  government.  If  the 
reader  has  followed  us  thus  far,  he  will  have  observed  that  the 
corporate  interest  of  the  country  has  assumed  a  position  in 
antagonism  to  the  people ;  that  it  has  a  secure  hold  upon  the 
industrial  and  financial  interests,  and  that,  to  a  great  extent, 
it  already  controls  the  action  of  the  legislative  and  executive 
departments  of  the  government,  state  and  national. 

25 


CHAPTER    XXII. 


THE  SUPREME  BENCH  INVADED  —  ITS  DECISIONS  REVIEWED. 

WE   are  aware  that  many  look  upon  the  final  decisions 
of  courts  with  a  degree  of  awe  and  respect  which  is 
almost   reverential.      The  railroad   companies  of  the 
country,  with  all  their  paid  attorneys,  are  now  extremely  jeal 
ous  in  their  efforts  to  convince  the  public  that  the  supreme 
court  of  the  United  States  is  a  body  of  the  greatest  jurists  the 
world  ever  produced;  that  their  decisions  are  pre-eminently 
able,  and  that  it  is  disloyal,  if  not  rank  treason,  to  call  them  in 
question,  or  to  even  criticise  theml     While  we  feel  bound  to 
recognize  the  decisions  of  courts  as  binding  until  they  are  re 
versed,  we  claim  that  it  is  not  only  the  right,  but  the  duty  of 
every  citizen  of  the  republic  to  examine  these  decisions,  and 
to  approve  or  condemn,  as  to  his  judgment  shall  seem  right. 
We  examine,  and  approve  or  condemn,  acts  of  congress  and 
state  legislatures;  we  discuss  the  motives  of  legislators,  and 
when  acts  have  been  passed  which  are  not  acceptable,  their  re 
peal  lias  been  demanded.     Not  unfrequently  repeals  have  been 
effected  soon  after  their  enactment,  either  because  of  patent 
defects,  or  because  the  people  condemned  them.     History  has 
proven  that  the  election  of  a  man  to  congress,  or  to  the  legis 
lature,  does  not  clothe  him  with  wisdom,  not  always  with  hon 
esty,  but  that  the  frailties  of  humanity  affected  him  as  it  did 
others.     The  same  rule  applies  to  courts  and  judges.     They 
are  made  of  the  same  flesh  and  blood,  and  are  subject  to  the 
same  infirmities  as  other  men.     Their  knowledge  is  not  per 
fect;  their  judgment  is  not  infallible,  nor  are  their  official  de 
cisions  always  pure  and  free  from  bias.     Instances  are  not 
wanting  where  judges  have  been  impeached,  and  removed  for 
dishonest  practices.     They  have  been  and  still  are  being  influ 
enced  by  popular  feeling,  by  certain  interests,  and  are  always 


THE  SUPREME  BENCH  INVADED.  203 

more  or  less  controlled  by  education  and  association.  Their 
decisions  are  often  reversed,  and  they  sometimes  reverse  their 
own  decisions. 

If  we  want  examples  of  a  corrupt  bench,  we  can  refer  to  the 
city  of  ISTew  York,  where  certain  judges  have  been  impeached, 
and  removed  from  office.  Of  partisan  judges,  we  find  them  in 
Louisiana,  Alabama,  Arkansas,  Kansas,  and  many  other  states. 
Of  ambitious  judges,  those  who,  while  acting  in  their  official 
capacity,  enter  into  political  contests,  and  use  their  judicial  po 
sitions  to  secure  other  preferment,  we  need  only  to  look  over 
the  history  of  any  of  the  states,  and  to  the  highest  court  in  the 
nation.  Judges  of  the  supreme  court  of  the  United  States 
are  found  identified  with  political  parties;  entering  the  lists  as 
candidates  for  higher  distinction ;  and  while  they  are  holding 
high  and  responsible  offices,  to  which  they  have  been  appoint 
ed  for  life,  they  are  seen  mixing  with  politicians  as  partizans, 
and  seeking  nominations.  Judges  whose  judicial  decisions 
have  been  controlled  by  public  sentiment,  can  be  found  in 
Iowa,  Illinois,  Indiana,  and  Wisconsin.  Judges  who  have  re 
versed  their  own  decisions,  can  be  found  in  any  state  in  the 
Union,  and  we  have  recent  examples  in  the  supreme  court  of 
the  United  States.  Such  being  the  facts,  it  is  not  strange  that 
railroads,  and  other  great  corporations,  should,  to  a  very  con 
siderable  extent,  influence  the  actions  and  decisions  of  courts. 
We  feel  warranted  in  saying,  that  the  decisions  of  courts,  more 
than  everything  else  combined,  have  promoted  the  rapid 
strides  made  by  railroad  corporations  toward  a  complete  de 
struction  of  republican  institutions.  The  pernicious  practice 
of  solving  all  doubtful  points  in  favor  of  these  corporations  by 
the  "judicial  construction"  of  statutes,  or  what  might  be 
called  "judicial  legislation,"  has  been  of  vastly  more  benefit  to 
them  than  all  the  grants  received  from  legislative  bodies.  Leg 
islatures  do  not  possess  the  power  to  grant  to  any  individual, 
company,  or  corporation,  exclusive  rights  or  priveleges,  unless 
such  power  is  conferred  by  the  constitution.  The  rule  former 
ly  obtained,  that  in  cases  where  the  rights  of  the  public  and 
that  of  an  individual  or  corporation  came  in  conflict,  an  act  of 
the  legislature  of  doubtful  authority  would  be  construed  in  fa 
vor  of  the  people.  The  reason  for  this  rule  of  construction  is 


204  MONOPOLIES    AND    THE    PEOPLE. 

obvious.  The  people  are  sovereign.  All  the  powers  not  del 
egated  to  the  government,  or  to  some  department  of  it,  were 
retained  by  the  people.  Hence,  when  a  question  was  present 
ed  involving  a  doubt  of  its  constitutionality,  and  a  decision  in 
favor  of  the  individual  or  corporation  would  deprive  the  peo 
ple  of  any  of  their  reserved  rights,  it  was  resolved  in  favor  of 
the  sovereign  people.  The  act  was  held  to  be  unconstitutional 
because  the  legislature  could  not  exceed  the  scope  of  the  au 
thority  conferred  upon  it.  The  constitution  was  a  limitation 
upon  legislation. 

In  a  former  chapter  we  have  attempted  to  show  the  distinc 
tion  between  the  power  of  the  states  and  general  government 
under  the  constitution ;  to  demonstrate  that  the  power  of  states 
was  supreme  in  all  matters  save  in  those  expressly  conferred 
upon  the  general  government  by  the  constitution,  and  that  for 
this  reason  the  constitution  of  the  United  States  should  be 
strictly  construed.  We  are  warranted  in  saying  that  this  rule 
obtained  until  questions  involving  the  interests  of  railroads  be 
gan  to  present  themselves  for  the  decisions  of  the  supreme 
court  of  the  United  States.  When  these  questions  began  to 
arise,  a  different  rule  was  demanded  by  the  companies,  and  by 
a  gradual  departure  the  supreme  court  has  reversed  this  old 
and  just  rule,  and  now  the  will  of  that  court  must  be  treated 
as  the  supreme  law  of  the  land.  Judicial  legislation  has 
usurped  the  place  of  judicial  investigation,  and  the  people  are 
without  remedy,  unless  a  return  can  be  had  to  constitutional 
rule.  There  is  now  a  general  complaint  throughout  the  whole 
land,  because  of  the  recent  interpretation  given  by  the  United 
States  courts  to  the  constitution;  their  disregard  of  statutes, 
constitutions,  and  decisions  of  state  courts,  which  have  reached 
a  point  which  virtually  makes  the  will  of  the  supreme  court 
superior  to  all  constitutional  and  statute  law.  During  the  war, 
the  power  and  jurisdiction  of  the  United  States  courts  were 
enlarged,  and  special  powers  were  conferred  upon  them  to 
meet  the  exigencies  of  the  time.  From  that  period  to  the 
present,  these  courts,  by  judicial  construction  of  their  power 
under  the  constitution  and  new  interpretations  of  that  instru 
ment,  and  by  judicial  legislation,  have  gradually  extended 
their  jurisdiction,  until  there  seems  to  be  no  constitutional  or 


THE  SUPREME  BENCH  INVADED.  205 

legal  barrier  to  their  decisions.  Questions  connected  with 
railroad  companies  have  increased  rapidly.  Conflicts  have 
arisen  between  the  public  and  these  corporations;  they  have 
multiplied  in  the  federal  courts,  and,  as  a  general  rule,  have 
been  decided  in  favor  of  the  companies.  In  some  instances, 
upon  questions  arising  exclusively  under  the  constitution  and 
statutes  of  a  state,  the  judges  of  the  federal  courts  have  disre 
garded  the  action  of  the  people  of  the  state,  overridden  their 
state  constitutions  and  statutes,  and  pronounced  the  decisions 
of  the  state  courts  invalid,  and  refused  to  be  bound  by  them, 
substituting  their  own  conclusions  in  the  interest  of  these  mo 
nopolies.  To  prove  this,  let  us  compare  some  of  the  earlier 
decisions  of  these  courts  with  those  of  more  recent  date,  citing 
cases  where  the  powers,  rights,  and  privileges  of  corporations 
were  involved,  and  where  conflicts  arose  between  the  govern 
ment  of  states  and  of  the  nation.  In  the  early  years  of  our  re 
public,  questions  connected  with  corporate  rights  were  sub 
mitted  to  the  supreme  court  of  the  United  States;  they  were 
ably  argued  by  the  best  constitutional  lawyers  of  the  nation, 
and  were  carefully  considered  and  decided  by  the  courts.  Up 
on  the  question  as  to  whether  state  courts  were  inferior,  the 
supreme  court  of  the  United  States  decided  that  they  were  not. 
The  same  court,  on  a  question  raised  as  to  the  authority  of  the 
legislature  of  a  state  to  grant  to  private  parties  exclusive  rights 
to  certain  property  in  Georgia,  held,  that  the  real  party  in  in 
terest  was  the  people,  and  that  it  was  only  when  the  legisla 
ture  acted  within  the  power  conferred,  that  their  acts  were 
valid;  that  it  was  the  peculiar  province  of  the  legislature  to 
prescribe  general  rules  for  the  government  of  society,  but  not 
to  apply  those  rules  TO  individuals  of  society. 

The  question  as  to  the  rights,  powers,  and  privileges,  of  cor 
porations,  came  before  the  supreme  court  of  the  United  States, 
and  was  fully  examined  and  decided,  in  1819,  in  what  is 
known  as  the  "  Dartmouth  College  Case."  The  charter  for 
the  college  had  been  granted  by  the  king  of  England  for 
educational  purposes.  It  was  in  no  sense  a  corporation  for 
pecuniary  profit.  Without  the  consent  of  the  trustees  of  the 
college,  the  legislature  of  New  Hampshire  amended  the  char 
ter  in  a  manner  not  acceptable  to  the  trustees.  They  refused 


206  MONOPOLIES    AND    THE    PEOPLE. 

to  recognize  the  change  made.  A  suit  was  instituted,  arid  the 
case  was  taken  to  the  supreme  court  for  a  decision.  The  point 
at  issue  was  whether  the  college  was  a  public  or  private  corpo 
ration;  and,  also,  as  to  the  extent  of  the  power  the  state  legis 
lature  possessed  over  its  charter.  It  is  not  our  purpose  to 
examine  all  the  points  raised  and  decided  in  that  case,  but  only 
to  notice  such  as  refer  to  the  nature  of  corporations  and  the 
power  of  the  state  governments  to  control  them.  In  deciding 
these  questions,  the  court  seems  to  have  looked  at  the  objects 
for  which  corporations  were  intended.  The  court  says;  "A 
corporation,  being  a  mere  creation  of  law,  it  possesses  only 
those  properties  which  the  charter  of  its  creation  confers  upon 
it,  either  expressly  or  incidental  to  its  ver}-  existence.  These 
are  such  as  are  supposed  best  calculated  to  affect  the  object 
for  which  it  was  created.  *  *  * 

"  The  objects  for  which  corporations  are  created  are  uni 
versally  such  as  the  government  wishes  to  promote. 
They  are  deemed  beneficial  to  the  country,  and  this 
benefit  constitutes  the  consideration,  and,  in  most  cases,  the 
sole  consideration  of  the  grant."  *  *  "  From  the  fact,  then, 
that  a  charter  of  incorporation  has  been  granted,  nothing 
can  be  implied  which  changes  the  character  of  the  institution, 
or  transfers  to  the  government  any  new  power  over  it.  The 
character  of  civil  institutions  does  not  grow  out  of  their  incor 
poration,  but  out  of  the  manner  in  which  they  are  founded, 
and  the  objects  for  which  they  are  created.  The  right  to 
change  them  is  not  founded  on  their  being  incorporated,  but 
on  their  being  the  instruments  of  government  created  for  its 
purposes.  The  same  institution,  created  for  the  same  objects, 
though  not  incorporated,  would  be  public  institutions,  and,  of 
course,  controllable  by  the  legislature.  The  incorporating  act 
neither  gives  nor  prevents  this  control." 

The  doctrine  above  enunciated  fixes  the  line  of  distinction 
between  public  and  private  corporations.  Those  created  for 
public  or  governmental  purposes  are  defined  to  be  "  public 
corporations,"  and  those  created  for  the  advancement  of  pri 
vate  enterprises  are  "private  corporations."  Private  corpo 
rations  possess  none  of  the  attributes  of  sovereignty,  and 
hence  are  to  be  treated  in  law  as  private  individuals  ;  the  act 


THE  SUPREME  BENCH  INVADED.  207 

of  incorporation  being  for  the  purpose  of  affording  the  corpo 
rators  proper  facilities  for  transacting  business.  Corporations 
being  the  mere  creatures  of  the  law,  they  possess  only  those 
properties  which  the  charters  of  their  creation  confer  upon 
them.  Under  the  decision  to  which  we  have  referred,  and 
from  which  we  have  quoted,  corporations  are  created  by 
statute,  and  are  subject  to  the  control  of  the  power  creating 
them.  A  grant  from  the  sovereign  power  to  an  individual,  or  to 
a  company,  is  not  necessarily  irrepealable,  nor  will  it  in  all 
cases  be  treated  as  a  contract.  Corporations  created  for  pub 
lic  or  governmental  purposes  are  binding  as  contracts  only  so 
far  as  they  affect  private  interests,  for  the  good  reason  that 
government  cannot  contract  with  itself. 

Nor  could  the  legislature  confer  exclusive  privileges  upon  a 
corporation,  the  exercise  of  which  would  deprive  the  people 
of  the  rights  guaranteed  to  them  in  the  constitution ;  for  the 
reason  that  the  attempt  to  clothe  a  corporation  with  such  priv 
ileges  would  be  an  unauthorized  act  on  their  part.  In  the 
case  of  "  Providence  Bank  vs.  Billings  &  Pittman,"  decided  by 
the  same  court,  in  1830,  it  is  said  that  "  The  great  object  of  an 
incorporation  is  to  bestow  the  character  and  properties  of  in 
dividuality  on  a  collective  and  changing  body  of  men.  This 
capacity  is  always  given  to  such  a  body  ;  any  privileges  which 
may  exempt  it  from  the  burdens  common  to  individuals  do  not 
flow  necessarily  from  the  charter,  but  must  be  expressed  in  it 
or  they  do  not  exist."  The  doctrine  obtained  that  corpora 
tions  can  take  nothing  by  implication,  and  that  unless  the 
power  to  regulate  and  control  them  has  been  surrendered  by 
the  legislature,  that  power  remains  undiminished.  The  rule 
that  grants  of  privileges  to  corporations  are  to  be  strictly  con 
strued,  when  the  rights  of  the  public  are  affected,  is  recognized 
in  this  case.  We  are  warranted  in  saying  that  it  is  only  since 
corporations  have  become  all-powerful  in  the  land  that  a  dif 
ferent  rule  has  obtained.  Under  the  statutes  of  the  United 
States,  and  as  formerly  held  by  the  supreme  court,  a  promis 
sory  note  given  by  a  citizen  of  a  state  to  another  citizen  of  the 
same  state,  but  transferred  to  a  citizen  of  another  state,  could 
not  be  sued  in  the  United  States  courts,  but  the  holder  was 
compelled  to  bring  his  action  in  the  state  courts.  This  rule 


208  MONOPOLIES    AND    THE    PEOPLE. 

obtained  until  counties,  cities,  and  towns  began  to  issue  their 
bonds  to  railroad  companies,  and  was  then  disregarded.  Rail 
road  companies  had  sold  and  delivered  these  bonds  to  parties 
in  Wall  street,  or  elsewhere ;  they  had  failed  to  fulfil  their 
contracts  with  the  parties  from  whom  they  had  received  the 
bonds,  and  when  suit  was  brought  upon  them  in  the  state 
courts  the  bondholders  were  beaten.  Suits  were  then  com 
menced  in  the  federal  courts,  the  plain  letter  of  the  statute  was 
disregarded,  the  established  decisions  of  the  supreme  courts 
were  overruled,  state  statutes  and  constitutions  were  treated 
with  contempt,  the  decisions  of  the  supreme  court  of  a  state, 
which  had  been  followed  for  years,  were  called  "oscillations" 
and  the  interests,  frauds,  and  deceits  of  railroad  corporations 
were  fully  protected  and  sustained ;  not  because  this  course 
was  supported  by  the  statutes  or  precedents,  but  because  such 
a  course  would  subserve  these  harmful  interests.  This  action 
on  the  part  of  the  supreme  court  was  not  the  result  of  any  dis 
honest  or  partisan  intent,  but  it  was  made  to  prevent  what  the 
court  was  pleased  to  term  "  great  wrongs  about  to  be  inflicted 
on  innocent  holders  of  bonds  purchased  of  railroad  companies. 
In  many  instances  the  innocent  bondholders  were  the  same 
parties  who,  as  railroad  men,  had  cheated  the  counties  and 
cities,  and  by  fraud  and  false  representation  had  obtained  these 
bonds,  for  which  no  consideration  has  been  paid  to  the  present 
time.  It  will  not  be  out  of  place  here,  as  showing  the  influ 
ence  of  these  corporations  over  the  supreme  court  of  the 
United  States,  to  refer  to  the  transactions  that  caused  the  first 
departure  by  the  court  from  the  settled  rules  of  decisions  on 
questions  arising  under  the  constitutions  and  statutes  of  states, 
and,  we  may  add,  initiated  a  rule  of  decisions,  followed  to  the 
present  time,  which  have  well  nigh  destroyed  states  rights. 
Under  this  new  rule  the  whole  country  is  governed  by  the 
supreme  court  and  corporations.  The  people  are  powerless, 
and  monopolies  reign  supreme.  We  refer  to  the  question  of 
aid  by  counties  and  municipal  corporations  to  railroads.  In 
many  of  the  states  municipal  corporations  have  subscribed 
stock  and  ^ssued  their  bonds  to  railroad  companies,  in  some 
instances  under  express  statute  authority,  and  in  others  with 
out  such  authority.  No  one  is  prepared  to  admit  that  com- 


THE  SUPREME  BENCH  INVADED.  209 

pulsory  payment  by  the  citizen  of  a  part  of  his  property,  or 
money,  to  aid  a  private  corporation  in  building  a  railroad,  is 
the  payment  of  taxes  for  the  support  of  government,  or  that 
the  levy  and  collection  of  a  tax  for  that  purpose  can  be  sup 
ported  by  any  section  of  the  constitution.  Yet  we  all  know 
that  such  taxes  have  been,  and  are  being,  levied  and  collected. 
Judge  Dillon,  in  his  work  on  municipal  corporations,  says : 
u  The  courts  concur,  with  great  unanimity,  in  holding  that 
there  is  no  implied  authority  in  municipal  corporations  to  incur 
debts  or  borrow  money  in  order  to  become  subscribers  to  the 
stock  of  railway  companies,  and  that  such  power  must  be 
conferred  by  express  grant.  To  become  stockholders  in  pri 
vate  corporations  is  manifestly  foreign  to  purposes  intended  to 
be  subserved  by  the  creation  of  corporate  municipalities,  and 
the  practice  of  bestowing  powers  of  this  kind  is  of  recent  date 
and  origin;  and  hence  the  rule,  that  in  order  to  exist,  it  must 
be  specially  conferred,  and  cannot  be  deduced  from  the  ordi 
nary  municipal  grants." 

If  the  above  quotation  is  good  law  (and  this  no  one  will 
deny),  the  recent  decisions  made  by  the  supreme  court  cannot 
be  supported.  But. in  order  to  avoid  the  force  and  effect  of 
this  principle,  and  to  provide  for  the  collection  of  bonds  ille 
gally  issued  (by  recent  decisions),  a  new  doctrine  has  been 
promulgated  by  the  court  which  overturns  state  statutes,  as 
well  as  the  decisions  of  state  courts.  Treating  of  this  class  of 
bonds,  Judge  Dillon  says  : — 

"  Respecting  negotiable  bonds  issued  under  legislative  au 
thority,  by  municipalities  for  such  and  kindred  purposes,  when 
in  the  hands  of  bona  fide  holders,  the  supreme  court  of  the 
United  States,  influenced,  doubtless,  by  a  keen  sense  of  the 
injustice  and  odium  of  repudiation,  has  at  all  times  displayed 
a  strong  determination  effectually  to  enforce  payment.  Ac 
cordingly  it  has  refused  to  follow  the  subsequent  decisions  of 
the  state  courts  against  the  validity  of  such  bonds,  in  cases 
where  the  prior  rulings  of  the  state  courts  had  been  in  favor 
of  the  power  to  issue  them ;  it  has  adopted  liberal  construc 
tions  of  statutes  and  charters  authorizing  the  creation  of  such 
debts ;  it  has  given  no  favor  to  defences  based  upon  mere 
irregularities  in  the  issue  of  the  bonds,  or  non-compliance  with 
26 


210  MONOPOLIES   AND   THE    PEOPLE. 

preliminary  requirements,  not  going  to  the  question  of  the 
power  to  contract ;  and  has  held  that  the  circuit  courts  of  the 
United  States  were  clothed  with  full  power  and  authority  by 
mandamus,  or  otherwise,  to  enforce  the  collection  of  judgments 
rendered  therein  on  such  bonds,  and  that  this  authority  could 
not  in  the  least  be  interfered  with,  either  by  the  legislature  or 
the  judiciary  of  the  states."  It  will  be  seen  that  for  the  pur 
pose  of  relieving  railroad  companies  from  their  liabilities  as 
guarantors,  on  bonds  issued  to  them  by  municipalities  (for 
these  bonds  were  uniformly  so  guaranteed),  the  supreme  court 
of  the  United  States  has  declared  the  statutes  of  states,  and 
the  decisions  of  state  courts,  absolutely  null  and  void.  In  vio 
lation  of  both  the  letter  and  spirit  of  the  constitution,  in  order 
to  compel  the  payment  of  bonds  issued  without  authority,  and 
in  violation  of  every  principle  known  to  the  law,  it  has  said 
that  these  bonds  must  be  paid  because  they  are  in  the  hands 
of  bonafide  holders. 

This  same  court,  as  we  will  hereafter  show,  when  the  hold 
ers  of  bonds  issued  by  railroad  companies  were  asking  pay 
ment,  has  released  the  companies  from  their  written  agreement 
to  pay  in  coin,  and  compelled  the  holders  to  take  at  par  depre 
ciated  paper.  When  the  bondholders  are  demanding  payment 
from  the  people,  of  the  bonds  issued  without  authority,  the 
court,  in  order  to  compel  payment,  nullifies  state  government ; 
but  when  these  same  bondholders  demand  that  railroad  com 
panies  shall  live  up  to  their  written  contracts,  have  decided 
that  they  need  not  do  so.  It  fears  the  stigma  of  repudiation 
when  the  people  are  called  upon  to  pay,  but  when  the  call  is 
made  upon  corporations  it  decided  in  favor  of  repudiation. 
Our  author  continues  :  "  It  has  upheld  and  protected  the  rights 
of  such  creditors  with  a  firm  hand,  disregarding  at  times,  it  would 
seem,  principles  which  it  applied  in  other  cases,  and  asserts  the  juris 
diction  and  authority  of  the  federal  courts  with  such  striking  energy 
and  vigor  as  apparently,  if  not  actually,  to  trench  upon  the  lawful 
rights  of  states  and  the  acknowledged  powers  of  the  state  tribunals." 

Municipal  corporations  have  no  right  to  become  stockhold 
ers  in  private  corporations  ;  acts  of  the  legislature  pretending 
to  confer  such  authority  are  void ;  the  officers  who  control  and 
administer  the  municipal  government  are  the  mere  agents  of 


THE  SUPREME  BENCH  INVADED.  211 

the  municipality,  and  can  only 'act  within  the  scope  of  the 
powers  conferred  upon  them  by  the  charter  of  the  munici 
pality  they  represent.  Neither  the  constitution  of  a  state,  nor 
of  the  United  States,  nor  the  charter  of  a  municipality,  can 
confer  upon  the  nation,  state,  county,  city,  or  town  the  author 
ity  to  compel  any  citizen  against  his  will  to  bestow  any  part  of 
his  money  or  property  upon  private  corporations.  And  it 
matters  not  whether  this  comes  in  shape  of  a  tax,  an  arbitrary 
appropriation  of  a  fraction  or  of  all  his  property  or  possessions 
to  such  private  corporation,  or  by  a  subscription  of  stock  to  it. 
If  the  national,  state,  or  municipal  government  can  in  either 
of  the  above  methods  compel  him  to  aid  in  building  up  and 
supporting  private  corporations,  then  private  corporations  are 
clothed  with  attributes  of  sovereignty,  and  all  private  citizens 
own  and  possess  their  property  subject  to  the  will  of  these  cor 
porations.  If  a  majority  of  the  qualified  voters  of  a  state,  or 
particular  locality,  are  in  favor  of  taxing  the  state,  or  local 
district,  to  the  extent  of  one-tenth  or  one-half  of  the  assessed 
value  of  all  property  in  the  district,  and  investing  the  amount 
in  a  railroad  enterprise,  the  minority,  notwithstanding  their 
protest  and  remonstrance,  must  submit  to  have  their  property 
taken  from  them  and  applied  to  the  same  object.  Their  con 
stitutional  rights  are  taken  from  them,  and  our  boasted  free  gov 
ernment  has  no  real  existence.  By  recent  decisions  of  the  su 
preme  court  of  the  United  States,  the  people  of  the  whole 
country  are  placed  in  that  position  now.  Railroad  corpora 
tions  have  been,  and  are  now,  under  the  fostering  care  and 
protection  of  this  court.  Statutes  have  been  so  often  disre 
garded  by  it,  when  their  interests  were  to  be  subserved,  and  in 
conflicts  between  the  people  and  these  monopolies  the  decis 
ions  have  been  so  uniformly  in  favor  of  the  latter,  that  it  is 
now  a  question  whether  the  government  controls  corporations, 
or  corporations  control  the  government.  If  a  pernicious  law 
is  enacted  by  congress,  or  a  state  legislature,  it  is  soon  re 
pealed.  The  men  who  compose  those  bodies  are  constantly 
changing,  their  term  of  office  is  short,  and  the  errors  commit 
ted  by  them  can  be  speedily  corrected.  The  judges  of  the  su 
preme  court  are  appointed  for  life  ;  the  people  have  no  control 
over  them :  their  decisions  cannot  be  reversed  by  any  depart- 


212  MONOPOLIES    AND    THE    PEOPLE. 

ment  of  the  government.  A  decision  of  the  supreme  court  is 
the  supreme  law  of  the  land,  and  cannot  be  reversed  or 
amended  by  any  other  power  in  the  land.  It  is  superior  to  all 
statute  law,  and  the  power  of  the  court  has  no  limit,  save  that 
fixed  in  the  constitution  and  statutes  of  the  United  States,  both 
of  which  must  receive  their  construction  and  interpretation 
from  the  court.  We  have  already  said  that  judges  of  this 
court  are  subject  to  the  infirmities  common  to  all  men  ;  that 
they  are  liable  to  be  influenced  by  the  same  causes  that  influ 
ence  others ;  that  no  matter  how  honest  and  pure  they  may 
be  in  their  intentions  and  actions,  their  decisions  were  liable 
to  be  controlled  by  surrounding  circumstances,  and  that  the 
influence  of  this  great  corporate  power  did  control  them.  In 
proof  of  this  we  need  only  look  at  their  course  of  decisions  on 
municipal  bonds,  and  on  bonds  given  by  railroad  companies, 
before  referred  to,  as  well  as  their  decisions  upon  the  nature  of 
railroad  corporations.  It  strikes  us  as  remarkable  that  the 
supreme  court  of  the  nation  should  have  or  entertain  any 
doubts  as  to  the  fact  that  these  corporations  are  private.  Upon 
what  principle  the  court  can  hold  that  railroads  are  public 
highways  is  not  readily  seen.  The  stock,  the  roads,  and  all 
other  property  belonging  to  the  different  railroad  companies, 
are  as  much  their  individual  or  corporate  property  as  are  the 
furnace,  the  factory,  or  the  mining  interests,  the  property  of 
the  companies  owning  them.  Their  ownership  is  as  complete 
as  that  of  the  private  person  who  owns  the  stage  and  team 
used  for  carrying  the  mails  in  certain  districts.  The  same  law 
that  governs  other  common  carriers,  governs  these  corpora 
tions.  Government  can  only  interfere  with  their  business 
when  they  abuse  the  privileges  granted  in  their  charters.  It 
cannot  compel  them  to  carry  the  mails,  save  in  pursuance  of 
contracts  made  with  them.  They  own  the  ground  upon  which 
their  roads  are  built,  and  no  one  can  travel  upon  these  roads, 
or  ship  freight  over  them,  save  by  the  permission  of  the  com 
panies.  While  courts  and  legislatures  have  the  constitutional 
right  to  regulate  and  control  these  corporations,  and,  if  need 
be  to  prevent  abuses  and  oppressions,  to  declare  their  charters 
forfeited,  as  in  cases  of  banks,  insurance  companies,  and  other 
corporations, — upon  no  principle  of  law  can  they  declare  them 


THE  SUPREME  BENCH  INVADED.  213 

public  corporations.  If  it  is  a  fact  that  they  are  public  corpo 
rations,  then  as  a  resulting  consequence  they  are  clothed  with 
the  attributes  of  sovereignty,  and  are  a  part  of  the  govern 
ment.  If  railroads  are  public  highways  for  any  purpose,  they 
are  for  all.  Until  they  cease  to  be  owned  and  controlled  by 
private  corporations,  it  will  hardly  be  claimed  by  any  respect 
able  court  that  they  are  public  highways,  in  the  same  sense  as 
common  public  roads,  nor  can  they  be  until  they  are  open  to 
public  use.  This  cannot  be  until  the  public  becomes  the 
owner  of  these  railroads. 

But  we  are  told  that  the  supreme  court  has  decided  the  ques 
tion,  and  declared  that  they  are  public  highways,  no  matter 
whether  they  are  owned  by  the  state  or  private  companies. 
We  have  not  seen  the  decision ;  but  if  such  decision  has  been 
made,  we  are  bound  to  accept  it  as  the  law  of  the  land,  un 
til  the  same  court  reverses  it.  Yet  if  the  court  was  to  decide 
that  a  river  was  a  railroad,  or  that  a  steamboat  was  a  train  of 
cars,  while  we  would  accept  this  decision  as  the  law,  we  would 
not  admit  that  such  was  the  fact.  We  are  not  aware  that  the 
question  as  to  whether  railroads  are  public  highways  has  ever 
been  before  the  supreme  court,  save  in  connection  with  the 
right  of  municipalities  to  subscribe  stock  and  issue  bonds 
therefor,  and  upon  the  question  of  voting  taxes  to  aid  in  their 
construction.  When  these  questions  have  been  presented  to 
the  supreme  court  of  the  United  States  it  has  held  that  they 
were  public  highways.  It  is  noticeable  that  these  decisions 
have  been  made  only  when  the  interests  of  these  corporations 
were  to  be  subserved.  In  a  recent  case  from  Wisconsin  the  su 
preme  court  decided  that  they  were  public  highways,  and  that 
it  was  just  as  lawful  to  levy  taxes  for  railroads  as  for  any  other 
public  works.  The  same  court  has  decided  in  a  large  number 
of  cases  when  suits  were  instituted  on  municipal  bonds,  that 
railroad  corporations  were  private  companies,  and  in  all  of  the 
states  where  the  question  has  arisen,  we  believe  they  have  been 
held  to  be  private  corporations.  We  might  cite  several  recent 
decisions  of  the  supreme  court  to  the  same  effect,  In  the  cases 
of  Kansas  Pacific  Railway  Company  vs.  Prescott,  Ribon  vs.  Chi 
cago,  Rock  Island,  &  Pacific  Railway  Company,  Putnam  vs. 
New  Albany  &  Sandusky  Railway  Company,  and  Chicago  & 


214  MONOPOLIES    AND    THE    PEOPLE. 

Quincy  Railway  Company  vs.  the  County  of  Otoe,  tried  in 
"Washington  last  winter,  the  court  virtually  decided  the  corpo 
rations  were  private,  and  not  public.  The  doctrine  to  be 
gathered  from  these  decisions  is,  that  when  the  interests  of 
these  corporations  demand  it  they  are  to  be  treated  as  private, 
but  when  the  question  is  as  to  their  right  to  compel  the  people 
to  contribute  of  their  substance  to  build  railroads,  then  the 
roads  are  public  highways.  If  the  corporations  are  private, 
and  their  roads  are  built  and  owned  by  them,  the  fact  that 
these  roads  are  private  still  exists,  notwithstanding  the 
courts  as  to  the  law  of  the  case  decide  that  they  are  public 
highways.  The  fact  that  such  a  decision  has  been  made,  is 
strong  proof  of  the  correctness  of  our  position,  that  the  cor 
porations  have  a  controlling  influence  over  the  judiciary  of  the 
country  more  to  be  dreaded  by  the  people  than  all  the  appli 
ances  that  can  be  brought  to  bear  upon  fhe  legislative  and  ex 
ecutive  department  of  the  government.  But  in  no  other  in 
stance  has  the  influence  of  these  corporations  over  the  supreme 
court  of  the  country  been  made  more  manifest  than  in  what  is 
known  as 'the  "legal  tender"  decision.  And  we  might  add 
that  no  other  decision  of  the  court,  and  no  act  of  any  depart 
ment  of  the  government,  has  proved  so  disastrous  to  the  peo 
ple  as  this  decision.  We  have  already  referred  to  the  means 
used  by  these  corporations  to  secure  a  majority  of  the  supreme 
court  favorable  to  their  designs,  and  of  their  success  in  the 
selection  of  judges  committed  to  their  interests.  It  only  re 
mains  for  us  to  review  this  decision  to  convince  the  most  skep 
tical  of  the  fact  that  corporations  have  captured  the  supreme 
court,  as  well  as  the  other  departments  of  the  government,  and 
the  effect  of  this  decision  has  given  to  these  corporations,  and 
Wall  street  brokers,  and  gamblers,  the  absolute  control  of  the 
finances  of  the  country.  But  before  coming  to  the  decision, 
it  will  not  be  out  of  place  to  remark,  that  money  is  always  the 
standard  of  value  for  all  commodoties ;  that  the  universally 
adopted  idea  of  money  means  coin — gold  and  silver — or, 
what  is  called  the  precious  metals.  Bank  bills,  treasury  notes, 
bills  of  exchange,  and  all  kinds  of  commercial  paper  are  only 
valuable  as  the  representatives  of  money.  The  fact  that  they 
are  expected  to  be  converted  into  money  gives  them  their 


THE  SUPREME  BENCH  INVADED.  215 

value  in  the  market.  Let  it  be  understood  that  they  cannot  at 
some  future  da}'  be  collected  in  money,  and  their  commercial 
value  ceases.  In  proportion  to  the  length  of  time  that  must 
elapse  before  any  bank  bills,  treasury  notes,  or  other  commer 
cial  paper  can  be  paid  in  specie,  does  its  value  increase  or 
diminish  in  commercial  transactions.  Nothing  but  money  of 
the  standard  value  can  be  made  a  legal  tender  in  contracts  be 
tween  individuals.  Congress  doe^  not  possess  the  power,  un 
der  the  constitution,  to  say  that  A  who  has  contracted  to  pay 
B  $1,000  in  money,  can  discharge  that  contract  by  paying  him 
§1,000  in  bank  bills  or  treasury  notes,  that  are  worth  in  money 
but  §800.  If  such  powers  exist,  then  all  standard  values  of 
property  is  destroyed,  and  it  fluctuates  in  value  as  the  price  of 
the  paper  representing  money  approaches  to,  or  recedes  from, 
the  money  standard.  The  rule  that  nothing  but  gold  and  sil 
ver  is,  or  can  be,  "legal  tender''7  has  been  uniformly  adhered 
to  from  the  formation  of  our  government,  until  1872,  when  a 
majority  of  the  supreme  court  reversed  the  rule,  and  decided 
that  what  are  termed  treasury  notes  are,  under  the  acts  of  con 
gress,  legal  tender  for  all  contracts  and  business  intercourse 
among  men. 

The  question  was  fully  argued  in  1869  before  a  full  bench, 
then  composed  of  a  chief  justice  and  seven  associates,  five  of 
whom  concurred  in  deciding  that  the  act  of  congress  making 
anything  but  gold  and  silver  a  legal  tender  was  unconstitutional. 
Before  the  decision  was  announced  Justice  Grier  resigned, 
leaving  but  six  associates  on  the  bench  when  the  opinion  was 
delivered.  Chief  Justice  Chase  delivered  the  opinion,  and,  in 
speaking  of  the  powers  of  congress,  says  :  "No  department  of 
the  government  has  any  other  powers  than  those  delegated  to 
it  by  the  people.  All  the  legislative  power  granted  by  the 
constitution  belongs  to  congress;  but  it  has  no  legislative 
power  which  is  not  thus  granted.  *  *  Not  every  act  of  con 
gress,  then,  is  to  be  regarded  as  the  supreme  law  of  the  land, 
nor  is  it  by  every  act  of  congress  the  judges  are  bound.  This 
character,  and  this  force,  belongs  only  to  such  acts  as  are 
made  in  pursuance  of  the  constitution."  The  court  then  de 
cides  that  there  is  in  the  constitution  no  grant  of  legislative 
power  to  make  any  description  of  credit  currency  a  legal  ten- 


216  MONOPOLIES    AND    THE    PEOPLE. 

der  in  payment  of  debts,  and  that  it  does  not  exist  as  inci 
dental  to  any  of  the  granted  powers.  That  the  power  does 
exist  in  congress  to  issue  bills  of  credit  or  treasury  notes,  but 
not  to  make  them  legal  tender  for  debts.  The  opinion  con 
cludes  as  follows :  "We  are  obliged  to  conclude  that  an  act 
making  mere  promises  to  pay  dollars  a  legal  tender  to  pay 
debts  previously  contracted,  is  not  a  means  appropriate,  plainly 
adapted,  really  calculated  to  carry  into  effect  any  express  power 
vested  in  congress ;  that  such  an  act  is  inconsistent  with  the 
spirit  of  the  constitution,  and  that  it  is  prohibited  by  the  con 
stitution."  This  decision  was  not  acceptable  to  corporations 
and  railroad  managers.  It  would  compel  them  to  live  up  to 
the  contracts  they  had  made,  and  destroy  their  power  of  con 
trolling,  in  connection  with  the  Wall  street  stock  jobbers  and 
gold  brokers,  the  entire  financial  interests  of  the  country. 
We  have  already  shown  how  this  combination  of  corporate 
interests  secured  an  increase  in  the  number  of  judges,  and 
that  Messrs.  Strong  and  Bradley  were  appointed  because  of 
their  opposition  to  the  legal  tender  decision.  None  of  the 
judges  who  had  concurred  in  the  decision  of  Judge  Chase  had 
changed  their  opinions  ;  these  were  then  dissenting  members 
of  the  court.  The  two  new  appointees  uniting  with  three 
dissenting  judges,  a  majority  of  the  court  could  over 
rule  the  long  settled  decisions  of  the  court,  and  sustain  the 
act  of  congress  making  depreciated  paper  a  legal  tender.  The 
law  of  the  land,  recognized  since  the  organization  of  the  gov 
ernment,  approved  by  all  the  eminent  jurists  and  statesmen 
who  have  lived  in  the  last  century,  could  be  overturned;  val 
ues  could  be  unsettled ;  the  financial  and  commercial  interests 
of  the  country  could  be  made  subject  to  this  great  corporate 
power  which  had  obtained  such  complete  control  of  the  dif 
ferent  departments  of  the  government. 

Soon  after  the  appointment  of  the  two  judges  above  named 
the  legal  tender  question  was  again  brought  before  the  court, 
a  full  bench  of  nine  judges  sitting  and  participating  in  the 
decision  of  the  question.  Five  of  the  nine  concurred  in  hold 
ing  the  legal  tender  act  constitutional,  Justice  Strong  deliver 
ing  the  opinion  of  the  court.  It  is  a  noticable  feature  of  the 
case  that  a  judge  who  had  just  taken  his  seat  should  be 


THE  SUPREME  BENCH  INVADED.  217 

selected  to  pronounce  the  decision ;  that  after  a  uniform  course 
of  decisions,  made  and  upheld  by  all  the  great  jurists  of  the 
country  for  eighty-five  years,  two  judges  who  had  just  been 
appointed  should  be  found  delivering  opinions  reversing  this 
long  settled  rule,  and  that  both  of  said  judges  were  appointed 
because  of  their  avowed  friendship  for  the  corporations  which 
were  to  be  so  largely  benefited  by  the  reversal  of  this  long 
settled  construction  of  the  constitution  upon  the  question  of 
legal  tenders,  and  it  seems  that  even  these  judges  base  their 
decision  upon  what  they  deem  the  necessity  for  a  reversal 
rather  than  upon  any  constitutional  grounds.  Justice  Strong, 
as  preliminary  to  the  opinion  of  the  court,  says  :  "  The  con 
trolling  questions  in  these  cases  are  the  following :  Are  the 
acts  of  congress,  known  as  the  legal  tender  acts,  constitutional 
when  applied  to  contracts  made  before  their  passage?  and, 
secondly,  Are  they  valid  as  applicable  to  debts  contracted  since 
their  enactment  ?  These  questions  have  been  elaborately  ar 
gued,  and  they  have  received  from  the  court  that  consideration 
which  their  great  importance  demands.  It  would  be  difficult 
to  overestimate  the  consequences  which  must  follow  our  de 
cisions.  They  will  affect  the  entire  business  of  the  country, 
and  take  hold  of  the  possible  continued  existence  of  the  gov 
ernment.  If  it  be  held  by  this  court  that  congress  has 
no  constitutional  power,  under  any  circumstances,  or  in  any 
emergency,  to  make  treasury  notes  a  legal  tender  for  the  pay 
ment  of  all  debts  (a  power  confessedly  professed  by  every 
independent  sovereignty  other  than  the  United  States),  the 
government  is  without  those  means  of  self-preservation  which, 
all  must  admit,  may,  in  certain  contingencies,  become  indis 
pensable,  even  if  they  were  not  when  the  act  of  congress  now 
called  in  question  was  enacted.  It  is  also  clear  that  if  we 
hold  the  acts  invalid  as  applicable  to  debts  incurred,  or  trans 
actions  which  have  occurred  since  their  enactment,  our 
decision  must  cause,  throughout  the  country,  great  business 
derangements,  wide-spread  distress,  and  the  rankest  injustice. 
The  debts  which  have  been  contracted  since  February  25th, 
1862,  constitute,  doubtless,  by  far  the  greatest  portion  of  the 
existing  indebtedness  of  the  country.  They  have  been  con 
tracted  in  view  of  the  acts  of  congress  declaring  treasury 
27 


218  MONOPOLIES    AND    THE    PEOPLE. 

notes  a  legal  tender,  and  in  reliance  upon  that* declaration. 
Men  have  bought  and  sold,  borrowed  and  lent,  and  assumed 
every  variety  of  obligation,  contemplating  that  payment  might 
be  made  with  such  notes.  Indeed,  legal  tender  notes  have 
become  the  universal  measure  of  values.  If  now,  by  our  de 
cision,  it  be  established  that  their  debts  and  obligations  can 
be  discharged  only  in  gold  coin ;  if,  contrary  to  the  expecta 
tions  of  all  parties  to  these  contracts,  legal  tender  notes  are 
rendered  unavailable,  the  government  has  become  an  instru 
ment  of  the  grossest  injustice,  and  debtors  are  loaded  with  an 
obligation  it  was  never  intended  they  should  assume.  A  large 
percentage  is  added  to  every  debt,  and  such  must  become 
the  demand  for  gold  to  satisfy  contracts,  that  ruinous 
sacrifices,  general  distress,  and  bankruptcy,  may  be  expected. 
These  consequences  are  too  obvious  to  admit  of  question. 
And  there  is  no  well-founded  distinction  to  be  made  between 
the  constitutional  validity  of  an  act  of  congress  declaring  treas 
ury  notes  a  legal  tender  for  debts  contracted  after  its  passage,  and 
that  of  an  act  making  them  a  legal  tender  for  the  discharge  of 
all  debts,  as  well  those  incurred  before  as  those  made  after  its 
enactment.  There  may  be  a  difference  in  the  effects  produced 
by  the  acts  and  in  the  hardship  of  their  operation;  but  in  both 
cases  the  fundamental  question,  that  which  tests  the  validity 
of  the  legislation,  is,  Can  congress  constitutionally  give  to 
treasury  notes  the  character  and  qualities  of  money?  Can  such 
notes  be  constituted  a  legitimate  circulating  medium  having  a 
defined  legal  value  ?  If  they  can,  then  such  notes  must  be 
available  to  fulfil  all  contracts  (not  expressed  by  exception) 
in  money,  without  reference  to  the  time  when  the  contract  was 
made/' 

This  quotation  from  the  opinion  of  the  court  may  be 
taken  as  a  sample  of  the  reasoning  in  favor  of  a  reversal  of 
former  decisions  on  the  question  of  legal  tender.  After  elab 
orate  argument  in  the  same  strain,  by  Justice  Strong,  and  also 
by  Justice  Bradley,  a  majority  of  the  court  decide  that  the 
legal  tender _,  acts  are  constitutional,  while  the  four  judges  re 
maining  on  the  bench,  who  but  a  short  time  before  had  made 
a,  contrary  decision,  dissent  from  the  opinion  of  the  majority. 
The  argument  of  the  majority  in  favor  of  the  decision  seems  to 


THK    SUPREME    BENCH    INVADED.  219 

ignore  the  real  question,  to-wit,  the  constitutionality  of  the 
acts  of  congress,  and  to  place  the  decision  upon  the  ground 
that  a  contrary  holding  would  be  ruinous  to  the  financial  in 
terests  of  the  country.  The  assertion  is  made  that  the  decision 
"  will  affect  the  entire  business  of  the  country,  and  take  hold  of  the 
possible  continued  existen.ee  of  the  government"  The  decision  was 
made  about  one  year  ago,  and  its  effects  on  the  business  inter 
ests  of  the  country  are  made  manifest.  If  the  court  believed 
that  the  decision  sustaining  the  legal  tender  acts  would  prove 
beneficial  to  the  people,  it  was  sadly  mistaken.  But  if  it  be 
lieved  such  a  decision  would  strengthen  monopolies,  and  en 
able  a  few  railroad  managers  and  Wall  street  brokers  to  corner 
and  control  the  finances  of  the  country,  then  the  decision  was 
a  success.  The  effect  has  been  to  unsettle  the  commercial  and 
financial  interests  of  the  country,  and  to  show  that  treasury 
notes,  if  they  are  the  standard  of  values,  are  a  fluctuating 
standard.  The  consequence  of  the  decision  has  taken  "hold 
of  the  possible  continued  existence  of  the  government"  and  has  en 
abled  the  gold  and  stock  gamblers  in  Wall  street  to  suck  the 
life-blood  of  the  nation.  The  decision  gives  strength  to  cor 
porations,  who,  uniting  with  Wall  street  brokers,  are  depleting 
the  treasury  of  the  nation  to  advance  their  own  private  pur 
poses.  By  the  decision  two  standards  of  value  are  fixed :  one 
that  is  stable,  and  must  ever  remain  so  —  the  standard  of 
money — gold  and  silver  ;  the  other,  the  standard  of  fluctuating 
paper,  of  no  intrinsic  value,  liable  to  be  inflated  or  depressed, 
as  shall  best  subserve  the  interests  of  the  parties  who,  by  com 
bining,  have  got  such  absolute  control  of  the  market  as  to  be 
able  to  change  the  value  of  this  legal  tender  paper  at  pleasure. 
The  idea  advanced  in  the  decision,  that  to  declare  that  nothing 
but  coin  could  be  a  legal  tender,  would  cause  widespread  ruin, 
presents  but  a  partial  view  of  this  matter.  As  a  matter  of 
fact,  no  act  of  congress  prior  to  1862  had  ever  been  passed 
making  anything  but  coin  a  legal  tender ;  nor  was  there  any 
decision  of  the  supreme  court  recognizing  or  deciding  that 
paper  money  could  be  a  legal  tender  until  1872  ;  and  yet  no 
such  widespread  ruin  had  overtaken  the  financial  interests  of 
the  country  as  has  manifested  itself  since  that  decision  was 
rendered. 


220  MONOPOLIES   AND   THE    PEOPLE. 

Simultaneous  with  the  decision  of  the  court  declaring  treas-. 
ury  notes  legal  tender,  the  quantity  of  coin  in  the  treasury  be 
gan  to  decrease,  and  one  year's  experience  has  sufficed  to  re 
duce  the  amount  from  one-third  to  one-half,  and  in  proportion 
the  amount  controlled  by  Wall  street  has  increased.  The  sec 
retary  of  the  treasury  is  now  obliged  to  have  recourse  to  the 
$44,000,000  of  treasury  notes  held  as  a  reserve  to  prevent  panic 
and  disaster.  This  decision  does  not  benefit  the  importing 
merchant,  who  must  pay  in  coin  ;  jit  does  not  benefit  the  legiti 
mate  business  of  the  country ;  it  does  not  benefit  the  farmer, 
or  any  of  the  industrial  interests  of  the  country,  because  in 
buying  and  selling,  if  payments  are  made  in  paper  (legal  tender) 
the  prices  of  the  articles  bought  and  sold  are  fixed  by  a  gold  or 
coin  standard.  Coin  is,  in  all  dealings,  the  measure  of  values. 
The  decision  of  the  court  does  not  and  cannot  change  these 
facts.  The  only  parties  who  derive  any  real  benefit  from  it  are 
corporations  and  brokers,  who  can  save  large  amounts  by 
being  released  from  their  contracts.  Another  argument  used 
by  the  court  in  favor  of  the  decision  is,  that  every  independent 
nation  possesses  the  power  to  make  paper  a  legal  tender,  and 
that  it  must  be  possessed  by  our  government.  The  answer  to 
this  is,  that  the  constitution  does  not  confer  upon  congress, 
or  the  courts,  even  by  implication,  any  such  power.  And  if 
we  admit  that  other  nations  possess  it,  we  conclude  it  is  be 
cause  the  fundamental  law  recognizes  it,  or  because  the  gov 
ernment  is  of  unlimited  power. 

The  court  decides  that  "  legal  tender  notes  have  become  the  uni 
versal  measure  of  values"  This  is  simply  untrue.  In  all  quo 
tations  of  values,  the  measure  is  fixed  by  gold,  and  then  legal 
tender  notes  are  quoted  as  being  worth  such  per  cent  less  (or 
what  amounts  to  the  same  thing);  gold  is  quoted  as  being  worth 
ten,  fifteen,  twenty,  or  more  cents  to  the  dollar  more  than 
paper,  and  while  the  value  of  gold  is  fixed,  that  of  treasury 
notes  is  constantly  fluctuating.  Under  this  decision  railroad 
companies,  and  their  associates,  the  Wall  street  gamblers,  con 
trol  the  finances,  while  all  the  honest  and  legitimate  business 
of  the  country  languishes.  Had  the  court  designed  to  place 
the  whole  interests  of  the  government  and  the  people  in  the 
power  of  these  corrupt  rings  and  dishonest  brokers,  no  more 


THE  SUPREME  BENCH  INVADED.  221 

effectual  means  could  have  been  devised  or  adopted.  Justice 
Bradley,  in  his  opinion  concurring  with  the  opinion  of  Justice 
Strong,  makes  use  of  the  following  bold  and  dangerous  lan 
guage  :  "It  is  absolutely  essential  to  independent  national  ex 
istence  that  government  should  have  a  firm  hold  in  the  two 
great  sovereign  instrumentalities  of  the  Sword  and  the  Purse, 
and  the  right  to  wield  them  on  occasions  of  national  peril.'* 
Let  this  pernicious  doctrine  be  accepted  as  the  law  of  the 
land ;  let  the  purse  and  the  sword  be  placed  in  the  hands  of  gov 
ernment  officials  without  restrictions,  and  what  vestige  of  re 
publican  institutions  is  left  ?  What  difference  is  there  between 
our  government  and  absolute  despotism  ?  But  more  than  this, 
let  the  highest  court  of  a  nation,  by  a  partisan  decision,  place 
the  purse  of  the  nation  in  the  hands  of  a  gigantic  monopoly, 
banded  together  for  the  purpose  of  plundering  the  public,  and 
what  vestige  of  independence  is  left  the  people  ?  Reader,  look 
carefully  at  the  almost  unlimited  power  the  corporations  of 
the  country  have  obtained  over  each  department  of  the  gov 
ernment  ;  at  the  legal  tender  decision  and  its  effect  upon  the 
people  of  the  country,  and  then  ask  yourself  if  we,  as  a  nation, 
are  not  nearing  the  point  where  we  cease  to  be  a  republic, 
save  in  name.  This  decision  impairs  the  obligation  of  con 
tracts,  in  violation  of  the  letter  and  spirit  of  the  constitution. 
It  compels  the  creditor  to  take  from  the  debtor  irredeemable 
paper  at  par,  on  a  contract  payable  in  money.  It  says  that  a 
mere  promise  to  pay  is  a  legal  tender.  It  makes  it  absolutely 
impossible  to  resume  specie  payment  because  it  withdraws  all 
coin  from  circulation,  and  does  away. with  the  necessity  for  its 
use  in  domestic  transactions.  The  coin  of  the  country  is  ship 
ped  to  foreign  countries  to  meet  demands  against  us  in  those 
countries,  and  to  pay  for  such  commodities  as  we  purchase 
from  them.  Credit  currency,  no  matter  whether  it  is  issued 
by  the  general  or  state  government  is  not,  nor  can  it  under  the 
the  constitution,  be  made  a  legal  tender  by  act  of  congress  or 
by  a  decision  of  any  court  in  the  land,  because  the  laws  of 
trade  will  control  the  whole  matter,  being  stronger  than  legal 
enactments  or  judicial  decisions.  Money  is  the  universal 
medium  or  common  standard  which  fixes  the  value  of  all 
other  things  that  can  be  sold  or  bartered,  and  neither  the  con- 


222  MONOPOLIES    AND    THE    PEOPLE. 

gress  of  the  nation,  by  the  passage  of  a  law  declaring  that 
paper  shall  be  a  legal  tender,  nor  the  supreme  court  deciding 
that  such  law  is  constitutional,  can  impart  an  actual  value  to 
such  paper,  because  it  is  but  a  promise  to  pay  money.  They 
can  fno  more  accomplish  this  object  than  can  the  alchemist 
convert  iron  into  gold.  The  only  effect  of  this  decision,  as 
we  have  attempted  to  demonstrate,  is  to  place  the  people  more 
completely  in  the  power  of  corporations.  If  the  reader  has 
followed  us  he  will  not  fail  to  perceive  that  all  the  departments 
of  the  government  are  virtually  controlled  by  the  great  anti- 
republican  corporate  interests  now  overshadowing  and  cursing 
the  land  ;  and  that  the  supreme  court  of  the  United  States,  orig 
inally  intended  to  be  a  check  upon  unconstitutional  legislation, 
and  to  guard  with  jealous  care  the  rights  of  the  people,  has  be 
come  an  instrument  to  aid  this  great  power  in  its  war  upon 
the  rights  of  the  citizen  ;  that  by  judicial  construction  of  stat 
utes  involving  the  rights  of  corporations  and  the  people,  such 
decisions  have  been  made  as  leave  the  people  but  little  to  hope 
for  in  the  future,  and  induce  the  belief  that  the  will  of  the 
court,  and  riot  constitutional  law,  is  to  be  the  "  supreme  law 
of  the  land." 


CHAPTER    XXIII. 

BANK    MONOPOLISTS  —  THEIR   CONTROL    OF   THE    CURRENCY. 
A    BANKRUPT    FINANCIAL    POLICY. 

GOLD  and  silver  are  and  must  remain  the  standard  of  val- 
,  ues.  This  being  true,  any  attempt  to  substitute  any  oth 
er  standard  unsettles  values,  and  opens  avenues  for  reck 
less  speculation.  Bank  bills,  or  other  promises  to  pay,  are 
and  always  will  remain  unsafe  as  a  money  standard;  especially 
when  they  cannot  be  exchanged  for  specie,  save  at  large  dis 
counts.  The  policy  of  the  government,  of  substituting  treas 
ury  notes  for  coin,  as  legal  tender,  and  then  issuing  national 
currency  for  general  circulation  by  the  banks  of  the  country, 
has  been  effectual  in  preventing  the  circulation  of  coin,  as  well 
as  the  resumption  of  specie  payment.  No  good  reason  can  be 
given  for  issuing  two  kinds  of  currency,  or  for  providing  that 
one  kind  (treasury  notes)  shall  be  legal  tender,  and  the  other 
(national  currency)  shall  be  of  less  value,  good  in  ordinary  cir 
cumstances,  but  which  no  one  is  obliged  to  accept  in  payment 
of  debts. 

The  present  banking  law  provides  that  any  five  or  more  per 
sons  may  form  a  private  corporation  or  banking  association, 
and  upon  compliance  with  the  provisions  of  the  law,  transact 
all  business  usually  transacted  by  banking  associations.  As  a 
condition  to  the  issuing  of  bank  notes,  the  company,  after  it 
has  organized  according  to  law,  must  deposit  with  the  proper 
officer  in  Washington,  in  government  bonds,  an  amount  great 
er  by  ten  per  cent  than  the  amount  of  bank  notes  it  receives 
for  circulation.  If  it  deposit  $100,000  in  bonds,  it  receives 
from  the  comptroller  of  the  currency,  $90,000  in  national  cur 
rency,  which  it  can  issue,  and  as  occasion  requires,  must  re- 
deem  in  treasury  notes.  The  government  bonds  are  held  by 
the  department  as  security  for  the  redemption  of  the  bank 


224  MONOPOLIES    AND    THE    PEOPLE. 

notes  received  for  circulation,  and  the  government  pays  to  the 
different  banking  companies  semi-annual  interest  at  the  rate 
specified  in  the  bonds  deposited  by  the  companies  respectively. 
The  amount  of  tax  annually  collected  from  the  people  to  pay 
this  interest  to  bankers  is  between  $18,000,000  and  $20,000,000. 
All  that  the  people  receive  in  return  for  this  sum  is  the  privi 
lege  of  borrowing  national  currency  from  banks  at  legal  rates 
of  interest.  The  banking  companies  receive  from  government 
their  six  per  cent  annually  in  gold  on  their  bonds  deposited 
with  the  department  at  Washington,  and  the  lawful  rates  fixed 
by  the  states  respectfully  upon  loans  and  discounts  with  such 
other  profits  usual  among  bankers. 

"We  cannot  discover  the  wisdom  of  the  law  which  provides 
that  a  banking  company  shall  buy  an  amount  of  government 
bonds  equal  to  its  capital  stock,  paying  government  therefor, 
and  after  depositing  it  with  the  proper  government  officials, 
receive  interest  on  it.  If  a  man  pay  his  note  or  bond,  and 
gets  it  in  his  own  possession,  he  would  lack  wisdom  if  he  were 
to  continue  the  payment  of  semi-annual  interest  on  it  after 
that  time.  Government  is  doing  this  with  only  this  difference : 
It  says  to  the  banking  company:  "Buy  my  bonds,  pay  for 
them,  and  then  I  will  hold  them  in  trust,  and  pay  you  the  in 
terest  on  them."  We  can  see  no  good  reason  for  this  provis 
ion  of  the  law.  If  the  object  were  to  borrow  money,  it  could 
have  been  accomplished  by  receiving  it  directly  from  the  bank 
ing  company,  and  then  issuing  to  such  company  legal  tender 
notes  in  payment  therefor,  and  by  so  doing  government  would 
have  saved  the  large  amount  of  interest  now  being  collected 
from  the  people.  If  the  object  were  to  furnish  a  circulating 
medium,  the  legal  tender  treasury  notes  would  have  been  a 
preferable  currency.  The  government  would  have  hazarded 
nothing,  because  it  would  have  had  possession  of  the  full  value 
of  the  notes  or  bank  bills  furnished  the  company.  But  if  the 
object  were  to  foster  and  fatten  corporations,  then  the  law,  as 
passed,  has  fully  accomplished  its  purpose.  The  law  provides 
for  a  general  system  of  banking,  without  requiring  the  bank 
ers  to  keep  one  dollar  of  coin  for  the  redemption  of  their  issues. 
It  provides  for  the  redemption  of  currency  with  currency,  thus 
making  the  resumption  of  specie  payment  impossible,  so  long 


BANK   MONOPOLISTS.  225 

as  legal  tender  notes  are  in  circulation.  It  locks  up  from  one- 
tenth  to  four-tenths  of  all  the  capital  invested  in  banking,  and 
compels  the  people  to  pay  interest  on  this  amount  without  re 
ceiving  any  equivalent.  It  fixes  arbitrarily  the  amount  of  cir 
culating  medium  for  the  whole  country;  the  amount  being 
$356,000,000  in  legal  tender  notes,  and  about  the  same  amount 
in  national  currency;  and  of  this  last  amount  the  banks  are 
compelled  to  keep  on  hand  a  reserve  of  from  fifteen  to  twenty- 
five  per  cent  on  all  their  bills  and  deposits,  thus  leaving  for  cir 
culation,  throughout  the  entire  country,  not  more  than  $550,- 
000,000,  the  whole  of  which  is  irredeemable  in  coin.  It  places 
the  finance  of  the  whole  country  under  the  control  of  one 
man  —  the  secretary  of  the  treasury.  The  amount  of  currency 
being  fixed  by  law,  and  apportioned  throughout  the  country, 
with  no  means  for  its  increase,  it  is  not  difficult  for  speculators 
to  withdraw  sufficient  from  circulation  to  affect  injuriously  the 
commerce  of  the  country.  The  combined  corporate  interest 
of  the  country  can,  at  pleasure,  corner  such  amounts  as  to  cre 
ate  a  stringency,  and  if  desired,  a  panic.  We  have  shown  in 
a  former  chapter  the  combination  existing  between  railroad 
corporations  and  Wall  street  brokers,  and  their  control  of  the 
finances  of  the  country.  We  have  also  shown  the  effect  of  the 
legal  tender  decision  upon  the  financial  interests  of  the  coun 
try,  and  the  large  benefits  the  railroad  corporations  are  deriv 
ing  from  it;  and  that  they  controlled  to  a  great  and  dangerous 
extent  all  departments  of  the  government.  Under  the  present 
financial  and  banking  system  they  hold  the  whole  country  at 
their  mercy.  They  fix  prices  upon  all  the  farm  products  of 
the  country.  Having  full  knowledge  of  the  amount  of  curren 
cy  in  the  banks  of  the  great  commercial  centers,  as  well  as  the 
amounts  in  the  different  parts  of  the  country,  with  the  means 
in  their  own  hands  of  controlling  and  expanding  these  amounts 
at  pleasure,  by  withdrawing,  or  as  it  is  termed  "cornering'* 
the  necessary  sum,  they  fix  the  price  of  all  articles  of  com 
merce,  and  stocks,  and  gold.  The  government,  under  the 
present  financial  policy,  cannot  prevent  this  state  of  things. 
It  has  no  reserve  with  which  to  aid  the  people.  Nor  can  the 
banks,  if  they  had  the  inclination,  remedy  this  evil.  The  bus 
iness  interests  of  the  country  require  more  money.  The  gov- 


226  MONOPOLIES   AND   THE    PEOPLE. 

eminent,  as  well  as  the  banke,  are  prohibited  from  issuing 
more.  Because  of  the  lack  of  quantity  required  by  commerce, 
the  banks  are,  as  a  general  thing,  without  any  considerable 
surplus  on  hand.  When  these  corporations  and  brokers  de 
sire  a  stringency  in  the  market,  they  withdraw  from  the  banks 
a  few  millions  of  dollars  and  lock  it  up.  It  is  withdrawn  from 
the  already  insufficient  amount  in  circulation,  and  legitimate 
business  languishes.  Having  their  vast  corporate  stock  and 
bond  interest  to  protect,  being  engaged  in  constructing  rail 
roads,  having  created  large  debts  upon  their  roads  by  reckless 
and  dishonest  watering  of  stock  and  loose  issuing  of  bonds, 
they  seek  to  compel  all  commercial  and  industrial  pursuits  to 
pay  tribute  to  them,  and  they  accomplish  this  object  by  con 
trolling  the  currency  of  the  country.  A.  financial  system  that 
can  be  controlled  by  one  interest,  or  in  the  interest  of  one 
class  of  men,  is  bad.  When,  as  is  now  the  case,  that  interest 
is  a  combination  and  consolidation  of  the  greatest  monopolies 
that  ever  cursed  a  country,  the  system  should  be  changed. 

Under  our  present  system,  no  matter  how  evenly  the  cur 
rency  was  originally  distributed  over  the  country,  the  larger 
portion  of  it  finds  its  way  to  the  great  commercial  centers. 
The  merchant  must  carry  his  money  to  his  place  of  purchase, 
or  what  is  the  same  thing,  buy  an  eastern  draft  from  his  local 
bank,  which  bank,  in  order  to  command  eastern  exchange, 
must  have  deposits  in  eastern  banks.  The  farmer  who  ships 
his  produce  to  the  east,  must  pay  the  charges  for  transporta 
tion,  which  are  usually  collected  at  its  place  of  destination ; 
and  these  charges  being  much  more  than  one-half  the  entire 
value  of  the  shipment,  are  retained  in  the  east,  or  if  charges 
are  paid  to  local  agents,  they  are  forwarded  to  the  principal 
office  in  the  east.  Nearly  all  the  great  railroad  companies 
having  their  principal  offices  in  the  large  eastern  cities,  their 
earnings  are  forwarded  to  those  offices.  By  these  means,  the 
currency  of  the  country  is  concentrated  in  the  larger  commer 
cial  cities  of  the  country,  mainly  in  New  York,  where  it  is  in 
the  absolute  custody  of  these  great  railroad  corporations  and 
brokers ;  and  the  financial  and  banking  system  of  the  country, 
designed  to  meet  the  wants  of  the  people,  has  become,  in  the 
hands  of  these  giant  monopolies,  a  principal  agency  in  their 


•     BANK    MONOPOLISTS.  227  . 

oppression.  The  produce  of  the  farm,  and  of  the  entire  in 
dustrial  pursuits  of  the  country,  are  being  swallowed  by  this 
huge  monopoly,  and  those  others  created  by  our  tariff.  For 
this  state  of  things  there  is  no  relief  without  a  change  of  policy 
on  the  part  of  the  government.  An  increase  of  irredeemable 
paper  will  not  afford  relief.  Already  there  is  a  wide  margin 
between  coin  arid  currency.  An  increase  of  the  latter  would 
increase  that  margin,  and  lessen  values.  With  a  fix^d  amount 
of  increase,  the  same  interest  that  now  controls  the  finances 
would,  in  a  short  time  after  its  issue,  obtain  the  same  control, 
and  this  would  demand  another  issue ;  the  same  process  to  be 
repeated  until  our  currency  would  be  of  little  or  no  value, 
the  unlimited  increase  of  irredeemable  currency  would  in  the 
end  inflict  upon  the  country  absolute  ruin.  We  are  now  trav 
eling  in  that  direction.  Currency  is  only  of  value  as  the  rep 
resentative  of  money.  Now  (April,  1873)  a  dollar  in  paper 
represents  but  eighty-two  cents  in  money.  Our  government 
has  adopted  the  Utopian  idea  of  making  small  strips  of  paper, 
with  certain  printed  promises  thereon,  legal  tender.  This 
kind  of  paper  has  been  decided  by  the  supreme  court  to  be 
money,  the  "  measure  of  values."  Notwithstanding  the  laws 
of  congress  and  the  decisions  of  the  supreme  court,  this  meas 
ure  of  values  will  not  become  or  remain  stable  ;  it  is  gradually 
shrinking,  while  gold,  the  money  of  the  country,  is  disappear 
ing.  Unfortunately  for  us,  our  strips  of  paper  will  not  pass 
for  money,  or  legal  tender,  with  other  nations.  For  this 
reason,  the  coin  of  the  country  has  to  be  used  in  our  com 
merce  with  foreign  nations.  Within  the  last  year,  the  amount 
of  coin  in  this  country  has  decreased  over  §38,000,000.  The 
balance  against  us  in  our  dealings  with  other  countries  is  the 
above  named  amount.  Unless  some  course  is  adopted  that 
will  prevent  this  large  export  of  gold,  it  is  only  a  question  of 
time  when  we  shall  have  no  gold  in  the  country,  and  the  only 
representative  of  values  left  us  will  be  paper  money  without 
any  intrinsic  value.  Under  the  present  financial  policy  of  the 
government,  and  the  unlimited  control  that  corporations  and 
rings,  with  their  power  all  centered  in  Wall  street,  have  over 
the  finances,  we  need  not  hope  that  the  agricultural  products 
of  the  country  can  be  transported  to  the  seaboard  at  rates  that 


»228  MONOPOLIES    AND    THE    PEOPLE. 

will   enable  ns  to  export  the  same  to  foreign  countries  in  any 
considerable  amount.     We  cannot  pay  inland  and  ocean  trans 
portation,  and  compete  with  other  grain-producing  countries. 
The    markets   of   the   outside   world   are   practically    closed 
against  us.      With  our  high  protective  tariffs,    extortionate 
charges  for  inland  transportation,  lack  of  ocean  commerce, 
and  immense  foreign  debts,  public  and  private,  absolute  finan 
cial  ruin  must  overtake  us,  unless  a  different  policy  is  adopted. 
The  amount  of  currency  being  fixed  by  law,  the  government 
has  in   effect  declared  that  the  people  of  this  country  shall 
have  but  this  fixed  amount  for  all  the  purposes  for  which 
money  is  used.     The  effect  of  this  arbitrary  law,  followed  and 
supported  by  the  legal  tender  decision  of  the  supreme  court, 
is  to  prevent  any  increase  of  the  currency  or  money.      The 
control  of  the  currency  being  placed  in  the  hands  of  one  man, 
the  whole  financial  interests  of  the   country  «are  dependent 
upon  his  will.     ISTo  matter  how  great  the  wants  of  the  country 
may  be,  or  how  inadequate  the  supply,  no  departure  is  allowed 
from  the  inflexible  rule  as  to  reserves  that  the  banks  are  re 
quired  to  hold.     If  the  secretary  of  the  treasury  conclude  to 
sell  gold  to  ease  the  market,  he  does  so ;  if  he  decide  to  issue 
a  half  million  treasury  notes,  they  are  allowed  to  go  into  the 
hands  of  the  people,  and  withdrawn,  when  in  his  judgment, 
he  deems  it  advisable.     His  acts  create  a  feverish  excitement 
in  the  money  market  and  derange  business,  carrying  loss  to 
everybody,  except  Wall  street  brokers.     That  power,  so  nec 
essary  to  a  despotism,  and  so  destructive  to  republican  institu 
tions — the  control  of  the  purse  of  the  people,  and  of  the  gov 
ernment,  has  fully  obtained  in  this  country.     The  whole  peo 
ple  of  the  land  are  as  completely   under  the  control  of  the 
secretary  of  the  treasury  (and  he  in  turn  ruled  by   these  pow 
erful  combinations)  as  a  ward  is  ruled  by  his  guardian.     The 
system  is  bad,  and  should  be  changed  at  once.      The  gov 
ernment  should  control  its  own  finances,  and  the  people  should 
be  permitted  to  provide  for  themselves  without  asking  the 
permission  of  the  government.     We  subjoin  the  following  ex 
pression  of  views  of  one  of  the  ablest  and  most  experienced 
of  the  bank  officers  in  this  country : 


BANK    MONOPOLISTS.  229- 

•'  The  incompetency  of  special  legislation,  when  applied  to 
the  adjustment  and  regulation  of  the  paper  currency  of  the 
country,  I  presume  few  sensible  men,  at  all  acquainted  with 
the  subject,  will  question  ;  nor  is  it  possible  for  any  man  of 
business,  or  any  possessor  of  property,  in  whatever  shape,  to 
feel  safe  while  the  power  to  inflate  or  contract  the  currency  is 
arrogated  by  any  one  man,  whether  he  happens  to  be  some 
narrow-minded,  bigoted,  obstinate  official,  acting  on  his  own 
volition,  or  some  subordinate  clerk,  acted  upon  by  others. 

"  No  one  should  be  entrusted  or  tempted  with  such  a  power  ; 
for  no  man,  however  able  and  honest,  could  by  any  possibility 
justly  or  accurately  exercise  it.  Foolish  as  was  the  experi 
ment,  however,  we  have  tried  it :  and  with  the  ill  success  that 
was  inevitable. 

"  The  sway  to  and  fro  of  our  currency,  controlled  by  the 
ebb  and  flow  of  our  business  transactions,  consequent  upon 
seed  time  and  harvest,  is  subject  to  law  as  imperious  and  im 
mutable  as  any  that  governs  either  the  physical  or  moral  world ; 
and  in  just  the  degree  that  we  understand  and  conform  to  its 
action  can  we  hope  for  a  successful  solution  of  the  problem 
that  now  so  vexes  the  minds  and  disturbs  the  interests  of  all 
classes  of  the  community. 

"  The  nearest  approximation  we  have  yet  made  to  such  an 
understanding  and  conformity  has  been  in  the  New  York  free 
banking  law,  from  which  the  national  currency  act  has  bor 
rowed  all  of  any  merit  it  possesses. 

"  This  New  York  law,  free  from  the  vice  of  monopoly  which 
the  national  currency  act  inherits  from  the  necessities  of  its 
birth,  and  open  to  all  men,  as  any  honorable  pursuit  should  be 
in  this  republic  of  ours,  is  also  distinguished  by  three  salient 
points :  perfect  security  to  bill-holders,  freedom  from  arbitrary 
reserves,  and  systematic  redemption  of  bills.  In  this  last  fea 
ture  of  the  law,  disagreeable  as  it  is  at  times  to  speculation  or 
unwary  bankers,  lies  the  key  to  its  success,  checking  and  gov 
erning  as  it  does  by  its  conservative  action  all  over-issues,  while 
still  leaving  the  open  freedom  of  the  system  untouched  by  any 
useless  restriction ;  so  that,  no  matter  how  great  the  number 
of  those  who  choose  to  embark  in  the  business,  no  more  cur 
rency  can  be  kept  afloat  than  the  wants  of  the  country  de- 


230  MONOPOLIES    AND    THE    PEOPLE. 

mand.  The  national  currency  act  fails  because  it  is  a  monop 
oly  ;  because  it  has  only  a  nominal  redemption ;  and  because 
of  its  arbitrary  reserve  clause,  which  serves  only  to  hamper 
the  means  and  obstruct  the  usefulness  of  our  metropolitan 
banks  at  the  very  time  when  the  trade  of  the  country  most 
requires  their  services,  to  say  nothing  of  the  power  for  evil 
which  a  knowledge  of  this  fixed  limit  gives  to  the  gamblers 
and  speculators  who  hang  around  and  within  our  stock-ex 
changes  ;  and,  lastly,  because  it  has  no  power  of  expansion 
and  contraction  in  response  to  the  varying  calls  of  trade  and 
commerce. 

"  The  substitution  of  a  free  banking  law  for  the  national 
currency  act — in  the  mere  fact  of  the  release  it  would  give  us 
from  constant  petitions  to  Washington  officials,  leaving  the 
government  to  attend  to  its  own  monetary  affairs  and  strictly 
mind  its  own  business — would  go  a  great  way  toward  restor 
ing  and  maintaing  the  manhood  and  self-respect  we  are  fast 
losing,  from  our  constant  looking  up  to  and  attendance  upon 
the  central  power,  asking  to  have  done  for  us  things  which 
should  be  self-regulating  or  which  we  should  do  for  ourselves. 
Democrats  as  we  profess  to  be,  we  are  rapidly  aping  the  fol 
lies  and  acquiring  the  habits  of  dependence  upon  authority 
characteristic  of  the  older  civilizations  of  monarchial  Europe. 
It  is  hardly  time,  I  think,  for  us  to  take  the  backward  swing 
of  the  pendulum  of  political  progress,  that  is  sure  eventually 
to  land  us  where  we  began." 

A  careful  examination  of  the  financial  policy  of  the  gov 
ernment  ought  to  convince  us  that  a  change  is  necessary  to 
prevent  ultimate  ruin  and  bankruptcy.  With  gold  driven 
from  circulation  —  an  insufficient  amount  of  depreciated  cur 
rency  for  the  transaction  of  the  business  of  the  country,  and 
the  facilities  afforded  the  monopolies  for  controlling  our  whole 
commerce,  the  agricultural  and  industrial  interests  of  the 
country  languish — the  farmer  receives  no  reward  for  his  toil 
—  the  laborer  is  poorly  paid  —  and  general  prostration  extends 
over  the  land.  A  return  to  specie  payment,  or  an  increase  of 
aound  currency,  would  relieve  all  cause  of  complaint,  and  en 
able  the  industry  of  the  country  to  receive  a  fair  remuneration 
for  its  labor. 


CHAPTER   XXIV. 


OUR    TARIFF    POLICY. DOES    PROTECTION    PROTECT? 

A  DIVERSITY  of  opinion  exists  throughout  the  country 
upon  the  question  of  tariff.  Politicians,  statesmen,  and 
the  people  generally,  differ  as  to  the  policy  the  govern 
ment  should  adopt  respecting  it.  It  is  generally  admitted 
that  the  revenue  for  the  support  of  the  government  should  be 
derived  from  duties  levied  upon  imports.  The  real  point  upon 
which  a  difference  exists  is,  whether  the  government  should 
levy  a  tariff  for  revenue  alone,  or  whether  it  should  be  levied 
for  the  purpose  of  affording  what  is  termed  a  protection  to 
American  manufactures  and  interests.  This  question  is  no 
nearer  a  solution  now  than  it  was  forty  years  ago.  Those  who 
favor  protection  appeal  to  our  national  pride ;  the  necessity  of 
encouraging  home  manufactures,  and  of  competing  with  the 
cheap  labor  of  Europe.  A  tariff  for  protection  has  been  urged 
and  adopted  as  the  only  means  of  fostering  home  productions 
for  so  long  a  time  that  it  is  deemed  one  of  the  necessities  of 
the  country  by  its  advocates.  They  look  upon  it  as  a  chief 
means  of  affording  a  home  market  for  the  farm  produce  of 
the  country,  as  well  as  affording  a  market  for  all  manufactured 
articles.  While,  on  the  other  hand,  those  who  are  opposed  to 
a  tariff  save  for  revenue,  claim  that  what  is  termed  protection, 
is,  in  fact,  oppression ;  that  it  cripples  commerce,  taxes  the 
people  oppressively  and  unjustly,  and,  instead  of  benefiting 
the  producer  by  affording  him  a  market,  deprives  him  of  it. 
They  insist  that  the  agriculturalists  of  this  country  need,  and 
must  have,  the  advantage  of  foreign  market  in  order  to  make 
farm  pursuits  remunerative. 

We  have  been  combating  monopolies,  and  shall  attempt  to 
show  that  what  is  termed  a  protection  tariff  affords  no  protec 
tion  to  the  people  at  large,  or  to  the  operatives  and  laborers  in 


282  MONOPOLIES   AND   THE    PEOPLE. 

factories  and  shops,  but  only  to  the  capitalists  of  the  country. 
An  equitable  tax  for  revenue  is  one  that  is  levied  upon  articles 
of  foreign  growth  or  production,  that  enter  into  general  con 
sumption  ;  and  not  one  that  is  levied  upon  articles  the  main 
portion  of  which  are  of  home  manufacture.  It  is  only  the  im 
ported  article  that  pays  a  duty  to  the  government.  The  home 
manufacturer  does  not  sell  his  fabrics  for  less  price  than  is 
paid  for  the  imported  articles  of  like  character  and  value : 
hence  when  only  a  part  of  any  commodity  is  imported  and 
pays  a  duty,  and  the  other  part  is  supplied  from  home  manu 
factures,  while  the  government  derives  revenue  from  the  im 
ported  articles,  the  manufacturer  puts  into  his  own  pocket  the 
same  per  cent  that  is  paid  to  the  government  in  shape  of  im 
port  duty.  To  make  it  plainer  :  If  a  tariff  of  forty  per  cent  is 
paid  upon  the  imported  article,  when  it  is  sold,  the  purchaser 
must  re-pay  this  per  cent  to  the  importer,  but  the  manufactur 
er  can  advance  the  price  of  his  goods  so  as  to  realize  forty  per 
cent,  or  the  amount  of  the  tariff  over  his  former  prices,  and 
still  compete  with  the  importer.  The  tariff  protects  him  at 
the  rate  of  forty  per  cent,  which  must  be  eventually  paid  by 
the  consumer.  No  tariff  is  paid  on  home  manufactures,  and 
yet,  in  all  cases,  the  manufacturer  adds  to  the  cost  of  produc 
tion  the  amount  of  the  tariff  placed  on  like  articles,  and  col 
lects  it  from  the  purchaser  or  consumer.  A  tariff  for  protec 
tion  gives  to  the  manufacturers  a  monopoly,  in  some  cases  so 
complete  as  to  drive  the  foreign  article  from  our  ports.  In 
such  cases  the  government  receives  no  revenue,  but  the  manu 
facturer  makes  a  clean  profit  of  the  per  cent  fixed  by  the  tariff, 
all  of  which  is  eventually  paid  by  the  consumer,  and  for  which  he 
receives  no  consideration.  To  illustrate  this,  let  us  take  the  du 
ties  on  blankets  for  the  year  1871,  and  the  quantity  imported. 
The  duties  on  the  tour  classes  of  blankets  were  87,  88,  100, 
and  109  per  cent,  respectively.  The  whole  imports  for  that 
year  amounted  to  $19,355,  and  the  tariff  duties  amounted  to 
$17,316.  All  of  the  residue  of  blankets  purchased  during  that 
year  were  home  productions.  The  manufacturer  has  only  to 
mark  up  his  price  to  realize  about  one  hundred  per  cent  over 
the  price  at  which  they  would  have  been  sold  but  for  the  pro- 
tection  tariff  Take  boots  and  shoes  as  another  illustration  : 


OUR  TARIFF  POLICY. —  DOES  PROTECTION  PROTECT?    233 

We  imported  none  in  1871,  and  of  course  no  revenue  was  re 
ceived  on  these  articles'  in  that  year ;  yet  the  manufacturers 
had  the  benefit  of  a  tariff  of  thirty-five  per  cent  on  each  pair 
sold.  If  a  pair  of  boots  was  sold  at  $8.00,  the  protection  the 
wearer  paid  the  manufacturer  was  $2.80.  The  law  compels  the 
farmer  and  laborer  to  pay  that  sum  as  a  bounty  to  the  manufac 
turer.  On  cotton  goods,  the  consumer  pays  a  duty  of  from  thirty- 
five  to  sixty-three  per  cent.  For  almost  every  article  of  clothing 
worn  by  man,  woman,  and  child,  a  duty  must  be  paid.  The 
average  is  about  forty-five  per  cent  on  the  value.  Prices  are 
nearly  uniform  for  the  same  classes  of  goods,  whether  of  for 
eign  or  domestic  manufacture.  On  imported  articles  the  tariff 
is  paid  to  the  government;  on  domestic  manufactures  the 
duty  is  paid  to  the  manufacturer.  This  system  compels  the 
poor  man  to  contribute  more  than  his  fair  proportion  to  pro 
tect  the  already  rich  manufacturer.  To  illustrate  this,  let  us 
suppose  that  A  is  worth  $500,000,  and  has  a  family  of  four  to 
clothe,  while  B,  who  has  nothing  but  his  industry,  and  per 
haps  a  small  homestead,  has  a  family  of  eight  dependent  upon 
him  (as  a  general  rule,  the  poor  man  has  the  larger  family). 
Both  families  must  be  clothed  and  fed ;  each  must  contribute 
to  the  manufacturer  the  same  rate  of  protection.  The  man 
with  his  half  million  in  property  and  family  of  four  will  prob 
ably  purchase  as  much  for  his  family  as  the  poor  man  will  for 
his  family  of  eight ;  each  expends  for  his  family  during  the 
year,  for  clothing,  say  four  hundred  dollars.  It*  the  duty  on 
the  purchases  average  forty  per  cent,  each  pays  for  the  support 
of  the  government  and  to  protect  home  manufactures  the  sum 
of  $160.00.  The  sweat  and  toil  of  the  poor  man  contributes 
just  as  much  as  the  rich  man's  half-million.  Or,  suppose  A  is 
a  man  without  family,  arid  has  great  wealth,  and  B  is  depend 
ent  upon  the  product  of  a  small  farm  for  the  support  of  him 
self  and  family.  A  spends  for  clothing  $200.00,  while  B  is 
obliged  to  expend  $400.00  for  clothing  his  family.  Here  the 
labor  of  the  poor  man  pays  twice  as  much  as  the  capital  of  the 
rich  man  to  protect  home  industry  and  support  the  govern 
ment. 

The  above  illustrations  will  serve  for  all  articles  of  general 
consumption.     Let  us   look  at  the  effect  of  the  tariff  upon 
29 


234  MONOPOLIES   AND    THE    PEOPLE. 

other  articles,  taking  railroad  iron  as  an  illustration.  Under  a 
revenue  tariff  railroad  iron  was  sold  for  less  than  two-thirds 
of  its  present  cost.  Manufacturers  amassed  princely  fortunes ; 
laborers  were  better  paid  than  they  are  now;  the  iron  interests 
seemed  to  be  in  a  prosperous  condition ;  the  demand  was 
growing  and  increasing,  and  has  continued  to  increase,  until 
the  supply  is  insufficient;  and  both  foreign  and  domestic 
markets  are  depleted,  and  at  times  exhausted.  With  this  in 
creasing  demand  and  scant  supply  there  seems  to  be  no  good 
reason  for  government  protection  to  home  manufactures,  yet  a 
protective  duty  of  about  one-fourth  its  value  is  allowed  on 
railroad  iron.  While  the  companies  constructing  the  roads 
pay  this  duty,  the  producing  classes  also  pay  it  in  the  end,  in 
the  shape  of  appreciated  charges  for  transportation.  The  pro 
tection  afforded  to  manufacturers  does  not  extend  to  the  labor 
ers  and  operatives.  The  slight  increase  on  the  amount  paid  them 
does  not  meet  the  increased  cost  of  living  resulting  from  the 
protection  tariff*.  They  must  pay  more  for  what  they  consume, 
as  well  as  receive  the  pay  for  their  labor  in  depreciated  currency. 
The  effect  of  protecting  the  iron  interests  is  to  strengthen  a 
monopoly  that  is  now  so  rich  and  powerful  that  it  controls 
some  of  the  largest  states  in  the  Union.  Jfor  this  protection 
it  returns  no  equivalent.  The  effect  is  the  same  in  other 
manufacturing  states.  The  owners  of  the  factories  make  large 
profits,  but  the  laborers  and  operatives,  while  their  wages  have 
advanced,  really  do  not  receive  as  much,  over  and  above  the 
increased  cost  of  what  they  consume,  as  they  received  prior 
to  1860  under  a  revenue  tariff. 

The  purchasing  power  of  a  dollar  before  1860  was  as  great 
as  that  of  one  and  a  half  dollars  now,  for  the  reason  that  then 
it  was  the  value  of  a  coin  dollar,  while  at  the  present  time  it 
is  the  value  of  an  irredeemable  paper  dollar,  at  no  time  worth 
a  dollar  in  coin,  and  for  the  further  reason  that  the  present  tariff 
compels  labor  to  pay  for  its  purchases  from  thirty  to  eighty  per 
cent  for  protection  to  the  manufacturer.  Thus,  while  the  actual 
increase  of  wages  is,  as  shown  by  reports  made  after  investi 
gation,  but  twelve  per  cent,  the  cost  of  living  has  increased 
fifty  per  cent.  Under  the  plea  of  encouraging  home  manu 
factures,  the  operative  and  laborer  is  compelled  to  work  at 


OUR  TARIFF  POLICY. —  DOES  PROTECTION  PROTECT?    235 

starvation  prices,  and  it  is  not  strange  that  they  are  organizing 
mutual  aid  societies. 

Another  argument  in  favor  of  protection,  which  is  often 
urged,  is,  that  we  should  protect  our  people  from  the  com 
peting  effects  of  the  pauper  labor  of  Europe.  If  this  object 
were  accomplished  by  a  protective  tariff,  one  good  purpose 
would  be  achieved.  But  what  are  the  facts?  The  manufac 
turers  avail  themselves  of  the  higher  prices  warranted  under 
the  tariff,  and  then  import  their  laborers  and  operatives  from 
Europe,  and,  instead  of  finding,  as  formerly,  American  fac 
tories,  furnaces,  and  machine  shops,  operated  by  Americans, 
they  are  worked  mainly  by  imported  laborers  and  operatives, 
and  those  who  were  to  be  protected  and  receive  living  wages 
are  compelled  to  seek  employment  in  other  pursuits.  Instead 
of  protecting  our  own  laborers  from  the  competition  of  for 
eign  pauper  labor,  the  foreign  laborers  are  imported,  and 
supersede  those  who  were  promised  protection. 

Another  argument  in  favor  of  a  protective  tariff  is,  that  it 
will  afford  a  home  market  for  the  agricultural  products  of  the 
country.  Is  this  true  ?  The  vast  agricultural  resources  of  the 
great  west  and  south  demand  the  markets  of  the  world.  Illi 
nois  and  Iowa  can  produce  enough  to  supply  a  manufacturing 
population  who,  in  turn,  could  supply  all  the  fabrics  and 
manufactured  articles  demanded  by  the  entire  population  of 
the  whole  country.  If  we  are  to  have  the  balance  nicely 
drawn,  so  as  to  have  a  manufacturing  population  sufficient  to 
consume  the  agricultural  products  of  the  country,  then  we 
could  furnish  the  manufactured  articles  at  rates  that  will 
allow  us  to  export  to  other  countries  and  compete  with  them 
in  their  own  markets,  or  else  the  supply  will  so  far  exceed  the 
demand  that  only  a  limited  number  could  continue  manufac 
turing  pursuits,  and  a  protective  tariff',  no  matter  how  high, 
could  not  furnish  a  market  beyond  the  demand.  Let  us  refer 
to  the  returns  made  to  the  state  department  for  un  illustration 
of  one  point :  In  1860  the  exports  of  manufactured  articles 
to  foreign  countries,  under  a  revenue  tariff',  amounted  to 
$21,351,562.  The  total  amount  of  like  exports  in  1871,  under 
the  present  protective  tariff,  amounted  to  $13,038,753,  in  coin. 
The  exports  in  1860  were  in  excess  of  those  of  1871,  under 


236  MONOPOLIES    AND    THE    PEOPLE. 

the  highest  tariff  ever  known  in  this  country,  $8,282,811, 
showing  that  under  a  low  or  revenue  tariff  our  manufacturers 
could,  and  did,  sell  in  foreign  markets  more  than  under  the 
present  system  of  high  duties.  Again,  if  we  look  at  the  ex 
ports  of  meat  and  breadstuffs  for  the  years  1860  and  1871,  we 
will  iind  the  amount  exported  in  1860  exceeded  that  exported 
in  1871  $2,000,000.  We  have  not  the  ligures  before  us,  but 
believe  they  will  show  a  still  greater  falling  off  in  1872.  Now 
let  us  look  at  the  imports  during  the  same  period.  In  1860, 
we  imported  manufactured  articles  to  the  amount  of  $146,- 
177,136,  and  in  1871  to  the  amount  of  $165,463,679,  being  an 
excess  of  the  amount  for  the  year  1860  in  the  sum  of  $19,286,- 
543.  If  we  add  to  this  the  falling  off  in  exports  ($2,000,000), 
the  balance  of  trade  against  -us,  on  manufactured  articles,  as 
between  us  and  other  nations,  is  $21,286,543.  The  imports 
for  1872  far  exceed  those  of  1871,  and  the  balance  of  trade 
against  us  for  that  year  was  but  little  less  than  $40,000,000. 
But  if  we  take  our  entire  commerce  with  other  nations  in  ac 
count,  the  balance  against  us  in  1871  was  over  $100,000,000  ! 
In  1872  it  was  over  $140,000,000,  and,  if  we  add  the  amount 
of  interest  paid  annually  on  bonds  held  in  other  countries, 
payable  by  railroads  and  other  corporations,  and  the  general 
government,  the  balance  against  us  in  1872  was  not  less  than 
$250,000,000.  This  balance  must  be  paid  with  the  products 
oi'  our  country,  or  in  money.  We  have  not  coin  with  which 
to  pay,  and  under  our  protection  system  we  cannot  pay  with  our 
products.  A  protective  tariff'  makes  the  farmers,  the  laborers, 
and  all  consumers,  insurers  of  a  certain  profit  to  the  already 
powerful  combination  of  manufacturers.  While  the  mechanic 
must  depend  upon  the  demand  there  is  for  his  skill  and  labor, 
the  laborer  must  also  take  his  chances  in  the  same  way,  and 
be  content  to  accept  such  wages  as  his  services  will  command, 
and  the  farmer  must  depend  upon  the  demand  and  supply  for 
the  sale  of  his  farm  product,  and  not  unfrequently  will  sell  at 
ruinous  prices,  while  the  manufacturers  have  a  monopoly  in 
their  line — they  can  always  sell  at  a  profit;  all  they  need  to  do 
is  to  sell  about  as  cheaply  as  the  same  article  can  be  furnished 
for  from  a  foreign  market,  plus  the  "  protection  "  of  the  duty. 
The  duty  paid  on  the  foreign  article  is  the  amount  of  royalty 


OUR    TARIFF    POLICY. —  DOES    PROTECTION    PROTECT?          237 

the  manufacturer  charges  for  his  goods.  All  other  industries 
are  compelled  to  divide  their  labor  and  products  with  him. 
The  laborer  who  receives  $20.00  per  month  and  buys  cloth  of 
domestic  manufacture  for  a  suit  of  clothes,  for  which  he  pays 
$20.00,  contributes  about  $7.35  of  that  amount  to  "  protect " 
the  manufacturer.  The  farmer  who  sells  one  hundred  bushels 
of  wheat  for  $100.00  and  expends  the  amount  in  clothing  for 
himself  and  family,  donates  about  $38. 00  to  protect  the  manu 
facturer.  The  same  is  true  of  all  other  classes  of  consumers. 
Each  one  pays  from  thirty  to  eighty  per  cent  on  his  purchases 
to  protect  the  owners  of  factories,  furnaces,  etc. 

The  protective  tariff  has  destroyed  our  ocean  commerce.  It 
would  not  be  profitable  to  spend  time  in  reviewing  the  duty 
levied  upon  the  materials  and  in  the  construction  of  vessels 
for  ocean  commerce.  The  fact  is  well  known  that  our  carry 
ing  has  passed  into  the  hands  of  other  nations.  That  vessels 
can  be  built  more  cheaply  in  foreign  ports  is  well  known,  as 
also  that  American  ship  owners  build  or  purchase  their  ships 
in  Europe,  sail  under  English  colors,  and  use  English  papers, 
assigning  as  a  reason  therefor  their  inability  to  pay  the  duty 
upon  the  materials  used  in  ship  building.  So  oppressive  is 
this  duty,  and  so  damaging  has  it  become  to  our  commerce,  that 
congress  is  being  urged  to  grant  subsidies  to  ship  owners.  As 
a  necessary  result  of  this  system  of  protective  tariff,  the  Amer 
ican  built  ships  cannot  carry  freight  as  cheaply  as  those  built 
in  foreign  countries,  and  the  producer  must  be  content  to  have 
his  produce,  already  taxed  to  a  half  or  two-thirds  its  value  for 
imand  transportation,  taxed  beyond  the  amounts  charged  by 
the  vessels  of  other  nations  for  ocean  transportation,  or  allow 
the  ocean  trade  to  remain  as  it  now  is,  in  the  hands  of  Eng 
land.  American  seamen  must  abandon  the  ocean,  or  sail 
under  foreign  flags.  Protection  has  destroyed  our  mercantile 
navy,  and  compelled  our  seamen  to  seek  employment  else 
where,  and  in  other  occupations.  With  our  vast  agricultural 
wealth  demanding  the  markets  of  the  world,  the  protective 
policy  of  the  government  effectually  closes  our  ports  to  other 
nations,  while  the  farmer  is  obliged  to  accept  for  his  grain  the 
low  price  that  a  home  market,  already  glutted,  will  afford  him. 
The  protective  tariff  is  draining  the  country  of  coin,  and  mak- 


238  MONOPOLIES   AND    THE    PEOPLE. 

ing  it  impossible  to  resume  specie  payment.  Taking  it  in  con 
nection  with  the  combination  of  corporations,  and  Wall  street 
brokers,  the  prospect  of  having  coin  as  a  circulating  medium 
is  but  faint,  if  it  is  ever  possible. 

The  products  of  our  mines  for  the  year  1872  were  about 
$62,000,000,  and  for  the  last  four  years  have  been  nearly 
$200,000,000.  The  value  of  petroleum  produced  in  the  United 
States  for  the  year  1872  was  not  less  than  $60,000,000,  a  large 
portion  of  which  was  shipped  to  and  sold  in  foreign  countries, 
and  to  that  extent  should  be  reckoned  as  money  in  our  dealing 
with  foreign  nations.  In  1862  the  balance  of  trade  was 
against  us  to  the  amount  of  about  $250,000,000.  After  ab 
sorbing  the  produce  of  our  mines,  and  our  petroleum,  the  net 
balance  against  us  was  not  less  than  $120,000,000.  This  bal 
ance  had  to  be  paid  in  coin  or  in  the  issue  of  new  bonds.  At 
no  time  since  the  enactment  of  the  present  tariff  has  the  bal 
ance  of  trade  been  in  our  favor.  Thus,  notwithstanding  the 
high  duty  paid,  and  the  protection  afforded  by  the  tariff,  our 
demands  for  foreign  manufactures  increase  to  such  an  extent 
as  to  threaten  the  nation  with  bankruptcy.  According  to 
official  reports,  the  amount  of  coin  in  the  country  in  1868  was 
$350,000,000.  The  products  of  the  mines  since  that  date 
amount  to  $200,000,000.  The  amount  of  coin  now  in  the 
country  is  reported  less  than  $250,000,000,  and  most  likely 
will  not  amount  to  $200,000,000.  Protection  to  a  small  band 
of  monopolists  has  caused  an  annual  decrease  in  the  amount 
of  coin  in  the  country  equal  to  the  excess  of  imports  over  ex 
ports.  A  few  owners  of  factories  and  furnaces  are  being  ben 
efited  and  enriched  by  protection  ;  the  prices  of  manufactured 
articles  have  increased  on  an  average  about  fifty  per  cent.  The 
wages  of  operatives  and  laborers  have  increased  but  twelve 
per  cent ;  the  exports  of  manufactured  articles  have  decreased ; 
the  value  of  imports  has  increased ;  the  ocean  commerce  of 
the  nation  has  been  destroyed ;  the  prices  of  the  agricultural 
products  of  the  country  are  reduced  to  a  point  that  has  blasted 
the  prospects  of  the  farmer,  and  made  it  difficult  for  him  to 
live;  the  country  is  being  drained  of  its  precious  metals,  and 
an  irredeemable  currency  has  become  the  only  circulating 
medium ;  values  are  unsettled,  and  the  country  is  threatened 


OUR  TARIFF  POLICY. —  DOES  PROTECTION  PROTECT?    239 

with  financial  ruin — all  to  afford  protection  to  home  manu 
facturers  and  corporations.  Protection  is  but  another  name 
for  the  systematic  plunder  of  the  farmer,  laborer,  and  all  the 
industrial  interests  of  the  country,  by  a  class  of  monopolists 
that  should  be  classed  with  corporations,  stock  jobbers,  and 
Wall  street  brokers,  and  who  are,  in  part  at  least,  composed 
of  the  same  men  who  control  the  corporate  interests  of  the 
country. 


CHAPTER  XXV. 


PATENT    RIGHTS    AND    THEIR   ABUSES. 

/CLOSELY  allied  to  the  monopolies  of  which  we  have  been 
treating  is  that  of  patents  to  inventors.  The  original 
^-^  idea  in  granting  patents  was  to  protect  inventors  and  dis 
coverers  when  their  inventions  and  discoveries  were  new  and 
useful.  It  is  but  just  that  the  person  who  invents  or  discovers 
a  new  and  useful  principle  in  arts  or  mechanics,  or  makes  a 
new  and  useful  combination  of  principles  not  new,  should  be 
protected  in  his  discoveries  ;  that  for  a  limited  time  he  should 
reap  the  exclusive  benefit  of  his  discovery,  in  order  that  he 
may  receive  a  fair  consideration  for  the  benefit  his  fellow-men 
are  to  derive  from  his  studies  and  enterprise. 

To  these  inventors  and  discoverers  we  are  indebted  for 
much  that  is  of  great  value  to  the  public.  The  arts,  sciences, 
and  mechanics,  as  well  as  agriculture,  have  been  greatly  bene 
fited  by  discoveries  and  inventions.  The  wealth,  comfort,  and 
happiness  of  the  nation  have  been  increased,  while  the  invent 
ors,  because  of  the  protection  afforded  them,  have  received  a 
fair  remuneration.  The  fact  that  valuable  inventions  reward 
the  inventor  liberally  has  led  to  great  and  growing  abuses  of 
the  patent  right  statutes,  and  to  great  frauds  and  impositions. 
The  desire  to  acquire  sudden  wealth  has  caused  dishonest  ad 
venturers  to  enter  the  field  of  -invention  and  discovery,  with 
the  intent  of  defrauding  the  people,  as  well  as  deceiving  the 
patent  office  deparment.  The  same  desire  has  caused  those 
whose  inventions  are  of  value  to  resort  to  various  schemes 
and  subterfuges  to  continue  their  exclusive  right  to  manufac 
ture  and  sell  their  inventions  long  after  they  have  been  fully 
compensated  for  all  they  have  expended  in  thought,  time,  and 
labor,  in  arranging  and  perfecting  their  discoveries  and  inven 
tions.  Having  been  granted  a  monopoly,  they  contrive  to 


PATENT   RIGHTS   AND   THEIR   ABUSES.  241 

continue  it.  Lobbyists  and  congressmen  become  interested 
for  a  consideration,  and  patents  are  renewed  from  time  to  time 
by  an  abuse  of  the  law  that  was  designed  to  encourage  discov 
eries  and  inventions,  but  not  to  build  up  and  continue  oppres 
sions  of  the  people. 

No  class  of  the  community  has  suffered  as  much  from  these 
monopolies  as  the  agriculturalists.  All  improvements  in  farm 
ing  implements  and  machinery  are  patented.  Some  of  them, 
patented  more  than  a  quarter  of  a  century  ago,  are  still  under 
the  exclusive  control  of  the  patentees.  Reapers  that  cost  the 
manufacturer  but  fifty  or  sixty  dollars,  are  sold  for  from  one 
hundred  and  seventy-five  to  two  hundred  and  twenty-five  dol 
lars,  because  the  patentee,  or  his  assigns,  have  now,  and  for 
nearly  a  generation  have  had,  an  exclusive  right  to  make  and 
sell  them.  So  with  seeders,  plows,  harrows,  fanning  mills,  and 
almost  all  farming  implements.  The  farmer  is  obliged  to  pay  at 
least  one  hundred  per  cent  royalty  to  the  inventor,  or  his  assigns, 
before  he  can  receive  any  benefit  from  a  discovery  or  an  in 
vention  designed  especially  for  his  use.  The  inventors  have 
already  realized  princely  fortunes  from  their  inventions,  and 
the  intent  of  the  law  has  been  fully  accomplished ;  yet  the 
patents  are  continued,  and  no  one  is  allowed  to  make  or  sell 
these  implements  without  the  permission  of  the  inventor.  The 
law,  which  gave  an  exclusive  right  for  fourteen  years,  ha^  been 
amended  from  time  to  time  ;  the  rights  have  been  extended, 
until  patentees  and  their  assigns  annually  claim  tribute  from 
the  farmer  in  an  amount  that  is  oppressive.  Patent  right  men 
operate  together ;  they  combine  for  the  purpose  of  extorting 
from  the  people  of  this  country,  where  they  have  a  monopoly, 
while  at  the  same  time  they  sell  their  manufactured  articles  in 
foreign  markets  for  one-half  the  price  they  demand  in  this 
country.  We  might  illustrate  this  by  numerous  facts,  but  will 
content  ourselves  writh  reference  to  sewing  machines  and 
reapers.  These  are  all  patented,  and  all  have  patents  for  im 
provements  made  from  time  to  time,  many  of  which  improve 
ments  are  of  little  or  no  value,  save  as  a  pretext  for  the  renew 
al  of  the  patent.  A  sewing  machine  that  cannot  be  purchased 
in  the  United  States  for  less  than  seventy  dollars  costs  but 
twelve  or  thirteen  dollars  for  work  and  materials.  This  same 
30 


242  MONOPOLIES   AND   THE   PEOPLE. 

machine  (Singer's)  is  shipped  to  Europe  and  sold  for  $32.00. 
Here,  where  the  patentee  has  an  exclusive  monopoly,  we  pay 
$38.00  more  for  the  machine  than  it  costs  in  England.  We 
could  order  an  American-made  sewing  machine  from  Belfast, 
pay  freight  and  charges  twice  across  the  ocean,  and  get  it  for 
one-half  it  costs  to  buy  it  in  America.  If  you  purchase  a 
McCormick's  reaper  in  this  country,  it  will  cost  you  about 
$200.00.  You  can  order  the  same  machine  from  England,  pay 
freights  for  its  passage  twice  across  the  Atlantic,  and  get  it  for 
about  one-half  the  money.  The  manufacturer  cannot  sell  in 
this  country  without  paying  about  one  hundred  per  cent  roy 
alty  to  the  inventor,  but  he  can  ship  to  Europe  arid  sell  at 
one-half  the  price  charged  in  this  country,  and  realize  a  fair 
profit  on  the  sale.  When  a  farmer  purchases  a  reaper  for 
himself,  and  a  sewing  machine  for  his  wife,  paying  for  the  two 
$270.00,  he  pays  as  royalty  to  the  inventor,  $135.00.  This 
same  rate  has  been  paid  for  the  last  twenty-five  or  thirty  years. 
This  large  royalty  is  paid  to  the  inventor,  and  is  called  protec 
tion.  Continued  beyond  a  reasonable  time,  it  is  nothing  but 
legalized  robbery. 

The  fact  that  large  fortunes  have  been,  and  are,  made  by 
inventors  and  pretended  inventors,  has  filled  the  country  with 
sharpers  and  swindlers,  who  are  constantly  on  the  lookout  for 
an  idea  that  may  lead  to  some  sort  of  invention  upon  which 
they  can  apply  for  a  patent.  The  ease  with  which  patents  can 
be  obtained  encourages  them  in  their  undertaking.  If  we  are 
to  judge  of  the  ability  and  competency  of  the  examiners  of 
models  and  drafts  by  the  patents  issued  for  almost  all  con 
ceivable  articles,  we  must  conclude  that  the  only  qualifications 
they  possess  are  to  receive  the  fees,  and  recommend  the  is 
suing  of  letters  patent.  Principles  so  old  that  the  date  of  their 
discovery  is  lost,  that  have  been  in  use  so  long  "  that  the 
memory  of  man  runneth  not  to  the  contrary,"  are  being  mo 
nopolized  by  letters  patent,  until  a  mechanic,  or  farmer,  if  he 
puts  a  handle  in  a  hatchet,  a  hoe,  or  rake,  or  changes  the  ar 
rangement  of  a  harrow,  plow,  churn,  or  washboard,  must  ex 
pect  to  have  a  sharp  speculator  call  upon  him  for  royalty  for 
an  infringement  upon  his  patent.  Or,  if  a  seamstress  cuts  her 
thread  in  a  particular  way,  she  must  pay  royalty.  If  the  farm- 


PATENT   RIGHTS   AND   THEIR   ABUSES.  243 

er  makes  a  glove  to  protect  his  hands  in  husking  corn,  before 
he  has  used  them  a  half  hour,  some  vender  of  patents  will  call 
upon  him  for  royalty.  If  the  owner  of  a  house  attempts  to 
paint  it,  or  repair  the  roof,  he  must  pay  royalty  for  the  privil 
ege,  if  his  own  judgment  should  prompt  him  to  compound  his 
paints  with  some  article  not  ordinarily  used ;  or  to  use  for  his 
roof  a  kind  of  composition  not  in  general  use.' 

The  increase  in  the  business  of  procuring  patents  is  now  so 
great  that  it  has  become  a  general  and  common  nuisance 
to  the  whole  country.  The  following  is  a  list  of  one  week's 
business  in  the  patent  office : 

Patents  were  issued  in  one  week  to  applicants  from  the 
western  states  for  threading  nuts ;  broom  corn  duster ;  thresh 
ing  machine  ;  school  desk  and  seat ;  station  indicator ;  binding 
screw ;  corn  sheller ;  windmill ;  photograph  skylight ;  corn 
husking  thimble ;  land  pulverizer ;  manufacture  of  sweet  bis 
cuit  ;  railroad  frog ;  dres3  pattern ;  two  for  plows ;  thread  cut 
ter  for  sewing  machine ;  corn  husking  glove ;  wheel  plow ; 
bridle  bit ;  railroad  track  wrench ;  cradle  ;  paper  file ;  garden 
hose  holder;  sawing  machine;  saw  swage;  scythe  rifle;  butter 
package;  spring  hinge;  swage  for  forming  horse  shoes;  auto* 
matic  grain  weigher ;  fire-place  grate ;  potato  digger ;  auto 
matic  gate;  faucet;  stock  for  mill-stone  picks;  piston  valve  for 
steam  engine;  car  coupling;  motive  power;  grain  basket; 
dining  table ;  portable  fence ;  fishing  torch;  extension  table; 
driving  gear  for  hand  car ;  horse  collar ;  harrow ;  cross-cut  saw 
handle ;  extension  ladder ;  machine  for  cutting  leather ;  bee 
hive;  cloth  measuring  register;  cutter  for  tonguing  and  groov 
ing  lumber  ;  heating  stove  ;  rotary  steam  engine ;  manufacture 
of  steel ;  blast  furnace ;  compound  for  preventing  incrustation  ; 
fruit  press ;  fire  extinguisher ;  two  for  cultivators ;  hub  for 
heavy  wheeled  vehicles  ;  horse-shoe  attachment ;  egg  carrier ; 
hose  pipe  nozzle ;  cotton  cultivator ;  shoe  pegging  and  trim 
ming  machine ;  combined  seed  separator  and  drill ;  felloe ; 
filter  for  corn-juice,  oils,  &c.;  gate  hinge ;  distilling  of  turpen 
tine  ;  cotton  stalk  knocker ;  automatic  fan. 

The  above  comprises  only  a  partial  list  of  the  patents  issued 
in  one  week.  Followed  up  for  one  year,  the  list  of  patents 
would  swell  to  near  4,000 ;  about  one  in  twenty  of  which  are 


244  MONOPOLIES   AND   THE    PEOPLE. 

of  value,  while  the  residue  are  of  no  value  save  to  enable  the 
patentee  to  defraud  the  people  upon  whom  he  imposes  his  pat 
ent,  or  to  force  the  timid  to  pay  him  royalty.  Of  the  immense 
number  of  patents  obtained  for  improved  churns  and  wash 
ing  machines,  but  few  are  of  any  real  value.  The  same  is  true 
of  patent  bridges,  reapers,  and  mowers,  of  threshing  machines, 
of  seeders  and  planters,  of  fences,  and  almost  all  farming  im 
plements.  So  of  sewing  nachines. 

Many  of  the  patents  obtained  contained  no  new  principle,  dis 
covery,  or  combination,  but,  by  imposition  and  fraud,  adventur 
ers  obtain  letters  patent  for  something  in  general  use,  for  the 
purpose  of  levy  ing  blackmail,  in  the  shape  of  royalty,  upon  those 
who,  ignorant  of  any  exclusive  right  claimed  by  any  one,  contin 
ue  to  use  an  article  which  has  been  in  general  use  long  before 
the  letters  patent  were  issued.  But  few  farmers  or  mechanics 
have  escaped  the  claims  of  these  patent  right  sharpers.  Rath 
er  than  be  at  the  expense  of  defending  a  suit  in  the  United 
States  court,  they  submit  to  the  demands  of  the  man  who  pre 
sents  himself  as  the  agent  or  assignee  of  the  patentee  demand 
ing  blackmail,  well  knowing  that  the  rascal  has  no  legal  claim, 
but  prefering  to  buy  peace  rather  than  to  be  annoyed  by  vex 
ations  litigation. 

No  better  illustration  of  the  results  of  granting  letters  pat 
ent  for  pretended  inventions  or  discoveries,  as  well  as  of  the 
careless  manner  in  which  letters  patent  are  issued,  can  be 
found  than  is  presented  by  the  gate,  known  in  the  west  as 
"  Teel's  Patent."  This  gate  in  its  combination  and  construc 
tion  does  not  contain  a  single  new  principle.  The  same  iden 
tical  gate  has  been  in  use  for  thirty  years  in  various  parts  of 
the  Union.  With  the  addition  of  "friction  wheels"  or  "roll 
ers,"  or  "pivot  wheels"  (as  they  are  indifferently  called),  this 
gate  was  on  exibition  and  sale  in  many  of  the  western  states 
in  1863.  In  fact,  the  patent  for  the  friction  wheels  obtained 
in  that  year  was  attached  to  the  gate  and  publicly  exhibited, 
no  claim  being  made  for  a  patent  upon  the  gate,  but  only  upon 
the  attachment.  The  gate  itself  consists  of  battens  nailed  up 
on  the  ends  and  near  the  center  of  four  or  five  boards  which 
forms  the  gate,  with  the  posts  so  placed  that  after  it  is  pushed 
a  sufficient  distance  to  make  it  balance  on  its  center,  it  can  be 


PATENT   RIGHTS   AND   THEIR   ABUSES.  245 

opened,  its  center  acting  as  the  pivotal  point.  The  balancing 
principle  for  which  the  patent  was  obtained  was  first  discov 
ered  by  two  of  the  decendants  of  Father  Adam,  in  their  youth 
ful  days,  when  they  balanced  a  pole  or  board  across  a  log  or  a 
fence,  and,  seated,  one  on  each  end,  enjoyed  a  game  of  see 
saw.  The  little  boy  who  built  a  pig-pen  years  before  the  great 
intellect  of  Teel  forged  the  idea,  made  the  same  kind  of  a  bal 
ance  gate  for  it.  The  man  or  boy  of  past  generations  who  de 
sired  to  make  a  cheap  gate,  instinctively  made  a  Teel  Gate. 
Yet  some  ten  years  ago  the  mighty  intellect  of  Teel  forged 
the  idea,  produced  a  model  and  forwarded  it  to  the  patent 
office.  The  Scientific  (?)  Examiner,  who  decides  upon  the  mer 
its  of  all  inventions,  who,  if  he  had  traveled  and  observed  the 
common  farm  gate  in  many  parts  of  the  country,  must  have 
seen  the  gate  in  actual  public  use,  issued  to  Teel  letters  pat 
ent,  which  are  safely  and  securely  held  until  the  new  western 
country  is  settled  and  this  cheap  gate  is  in  general  use,  when 
he  and  his  agents  and  assignees  appear  and  demand  royalty. 
He  has  been  given  an  exclusive  monopoly  for  the  making, 
selling,  and  using  a  gate  that  is  not  new  in  any  of  its  princi 
ples.  By  this  fraud  of  the  applicant  and  the  incompetence  of 
the  examiner,  the  farmer  is  forbidden  to  use  the  old  invention 
of  a  cheap  gate  until  he  pays  a  bounty  to  a  patentee.  The 
law  for  the  protection  of  discoverers  and  inventors  is  prostitu 
ted,  and  the  people  compelled  to  pay  out  their  money  without 
consideration. 

The  same  state  of  facts  exists  with  respect  to  many  other  pa 
tents.  Men  travel  over  the  country,  examine  all  machinery 
and  farming  implements,  not  for  the  purpose  of  making  new 
or  useful  discoveries  or  improvements,  but  for  the  purpose  of 
learning  whether  they  cannot  so  contrive  as  to  collect  royalty 
from  others  for  an  invention  long  in  use,  but  for  which  the  in 
ventor  had  not  asked  or  received  a  patent.  Add  this  monopo 
ly  of  patent  rights  to  the  other  monopolies  now  cursing  the 
country,  and  the  need  of  a  speedy  reform,  or  the  alternative 
of  poverty  and  bankruptcy  among  the  producing  classes,  be 
comes  still  more  apparent. 

This  patent  right  monopoly  is,  in  a  great  measure,  owing  to 
the  want  of  proper  care  and  knowledge  in  the  department  of 


246  MONOPOLIES   AND   THE    PEOPLE. 

the  patent  office,  where  the  only  pre-requisite  for  the  granting 
of  letters  patent  for  almost  anything,  where  the  application  is 
not  contested,  is  a  model  and  the  patent  office  fee.  The  effect 
of  this  free  and  easy  course  in  the  department  is  to  bring  into 
disrepute  the  really  valuable  invention  and  discovery,  and  to 
impose  upon  the  people  useless  burdens. 


CONCLUSION. 

REFORMATION    OR    REVOLUTION.  —  A   RADICAL   CHANGE    DEMANDED 
IN   THE   ADMINISTRATION    OF    PUBLIC     AFFAIRS. —  CON 
CLUSIONS    OF   THE  AUTHOR. 

|  XLRST.     We  have  sought  to  call  the  reader's  attention  to 

rsome  of  the  monopolies  existing  in  our  land,  and  to  show 
their  power  and  influence  with  the  government,  and  their 
control  of  the  commercial  and  agricultural  interests  of  the 
country.  It  now  remains  for  us  to  direct  his  attention  to  the 
effect  of  these  monopolies  upon  the  people  and  prosperity  of 
the  country.  No  country  in  the  world  has  been  as  bountifully 
supplied  by  the  Creator  with  all  the  means  to  make  a  nation 
prosperous  and  happy  as  ours.  It  is  vast  in  extent  of  terri 
tory.  Its  soil  is  rich,  and  most  of  it  new.  Lying  in  all  lati 
tudes,  it  produces  fruits  of  every  climate.  The  husbandman  is 
assured  of  an  abundant  crop.  All  agricultural  and  horticultu 
ral  pursuits  are  rewarded  with  large  growths  and  bounteous 
harvests.  Our  shores  are  washed  by  oceans,  which  afford  us 
highways,  over  which  we  can  avail  ourselves  of  the  markets  of 
the  world ;  while  flowing  through  the  agricultural  portions  of 
our  common  country  are  our  great  rivers,  upon  whose  waters 
the  produce  and  manufactures  of  the  land  are  transported  to 
market.  Our  great  lakes  furnish  us  an  outlet  for  the  sur 
plus  product  of  the  great  west.  Our  sixty  or  seventy  thousand 
miles  of  railroad  traverse  our  country  in  all  directions,  reaching 
from  the  Atlantic  to  the  Pacific,  and  spreading  like  a  net 
work  from  the  lakes  to  the  gulf.  Our  mines  produce  immense 
yields  of  the  precious  metals,  while  our  hills  and  mountains 
are  full  of  iron,  coal,  and  lead.  Petroleum  flows  in  quantities 
which  should  add  largely  to  the  wealth  of  our  common  coun 
try.  Our  timber  is  not  excelled  by  that  of  any  growth  in  the 
world.  Our  lands  are  rich  in  fertility,  and  poor  only  in  price. 


248  MONOPOLIES  AND  THE   PEOPLE. 

The  Creator  has  done  for  us  all  that  could  be  desired  to  make 
us  prosperous  and  contented.  Our  government  is,  or  was  in 
tended  to  be,  based  upon  the  will  of  the  people.  Our  consti 
tution  recognizes  no  royal  rulers,  no  lords,  no  titled  gentry. 
Under  it  we  are  all  equal.  They  who  administer  the  laws  are 
selected  by  the  people.  In  contemplation  of  law,  all  are  equal 
— all  are  free  and  independent.  With  all  these  blessings  and 
advantages  we  ought  to  be  the  happiest  and  most  prosperous 
people  on  the  earth.  Peace,  plenty,  and  contentment  should 
reign  supreme  throughout  the  land.  What  are  the  facts  ? 

Throughout  the  entire  length  and  breadth  of  our  land,  mut- 
terings  and  complainings  are  heard.  From  the  farmers,  the 
mechanics,  and  laborers  alike,  the  complaint  is  heard,  "  We 
cannot  pay  our  taxes  and  support  our  families ;  "  "  Our  wages 
will  not  enable  us  to  buy  the  necessaries  of  life,  because  of  the 
large  duties  laid  upon  them ;  "  "  Our  farm  products  will  not 
pay  taxes,  charges  for  transportation,  and  other  burdens  im 
posed  upon  us,  and  leave  us  any  margin  ;  "  "  We  had  better 
let  our  lands  lie  idle  than  to  attempt  to  cultivate  them."  These 
and  like  complaints  are  heard  from  the  laboring  and  produc 
ing  classes.  Nor  are  their  complaints  without  cause.  Another 
interest  has  arisen  in  the  land  —  it  has  become  all-powerful. 
This  interest  penetrates  the  remotest  portions  of  the  country. 
It  calls  upon  the  laborer,  the  operative,  the  mechanic,  the 
farmer,  and  all  private  citizens,  for  a  division  of  the  products 
of  their  labor.  It  enters  the  halls  of  legislatures  and  of  con 
gress,  and  demands,  and  not  unfrequently  purchases,  special 
privileges  and  powers.  It  visits  the  executive  department  of 
the  government,  and  there  secures  special  favors.  It  stalks 
boldly  into  the  courts  of  the  country,  and  there  procures  unjust 
decisions  in  its  interest.  It  indeed  places  its  own  men  upon 
these  seats  of  justice,  that  the  judiciary  of  the  country  may  not 
fail  to  support  its  aims.  It  has  already  obtained  complete  con 
trol  of  the  finances  of  the  country.  It  has  corrupted  legisla 
tures  and  congressmen,  until  the  law-making  power  has  be 
come  a  party  to  schemes  of  robbery  and  plunder.  By  corrupt 
legislation  and  ex  parte  judicial  decisions,  it  has  destroyed  all 
the  old  republican  landmarks,  overridden  the  provisions  of  the 
constitution,  and  substituted  for  the  government  prepared  for 


249 

us  by  our  forefathers  an  oligarchy  that  rules  the  land  and 
holds  the  people  at  its  mercy,  and  their  property  as  its  lawful 
booty.  This  great  oppressor  of  the  people  is  the  railroad  cor 
porations  and  their  associates,  of  which  we  have  been  treating. 
Railroad  and  other  corporations,  brokers,  and  stock-jobbers, 
have  obtained  such  complete  control  over  the  government,  the 
people,  and  the  financial  and  commercial  interests  of  the  coun 
try,  that  they  who  depend  upon  agricultural  pursuits,  or  upon 
their  labor,  for  a  support,  are  deprived  of  those  God-given 
rights  which  formed  the  base  of  our  political  superstructure. 

Formerly,  the  people,  through  the  ballot  box,  governed  the 
country ;  they  were  sovereign.  In  this  republic  no  rival  power 
existed,  and  it  was  our  boast  that  our  people  were  free  and  in 
dependent.  Our  fundamental  law  is  still  the  same.  In  theory, 
our  people  are  still  sovereign  ;  in  fact,  most  of  their  sovereign 
ty  has  been  legislated  from  them.  Statutes  are  enacted  com 
pelling  the  people  to  divide  their  hard-earned  substance  with 
private  corporations  without  any  consideration ;  and  the  high 
est  courts  of  the  country  have  affirmed  the  constitutionality  of 
these  laws.  The  freedom  and  equality  which  was  our  nation 
al  boas,t  have  disappeared,  and  instead  thereof  the  people  are 
ruled  by  cruel  and  oppressive  task-masters,  who  are  fostered 
and  supported  by  legislatures  and  courts  in  their  united  pur 
pose  of  controlling  the  country.  These  oppressions  have  been 
endured  by  the  people,  with  but  feeble  efforts  to  regain  their 
rights,  until  the  alternative  is  presented  of  organized  resistance 
or  absolute  ruin.  Throughout  the  length  and  breadth  of  our 
common  country,  the  laboring  and  producing  classes  are  strug 
gling  for  the  necessaries  of  life,  whilst  those  who  own  and 
manage  the  corporations  of  the  country  have  firmly  grasped 
and  now  control  the  financial  and  commercial  interests  of  the 
country,  and  are  amassing  princely  fortunes  and  rolling  in 
wealth.  To  stay  the  course  of  their  oppressors,  and  get  back 
some  of  their  rights,  the  laboring  classes  are  organizing,  and 
demanding  of  their  employers  such  compensation  as  will  en 
able  them  to  supply  the  common  necessaries  of  life.  They 
demand  that  their  wages  shall  be  increased  in  proportion  to 
the  increased  cost  of  living,  occasioned  by  special  grants  arid 
privileges  bestowed  upon  corporations  and  monopolies ;  that 


250  MONOPOLIES   AND   THE   PEOPLE. 

instead  of  being  treated  as  vassals  of  the  despots  who  now  rule 
the  country  and  control  the  government,  that  their  rights  as 
freemen  shall  he  recognized. 

The  operatives  and  mechanics  are  banding  together  for  the 
same  purpose.  They  are  all  seeking,  in  the  same  degree,  to 
counteract  the  evil  effects  of  the  grants  and  privileges  conferred 
upon  monopolies.  The  farmers,  who,  as  a  class,  have  always 
been  deemed  the  most  independent  in  the  country,  are  so  im 
poverished  by  these  monopolies  that  they  have  been  compelled 
to  band  together  for  mutual  protection.  No  choice  was  left 
them.  The  bestowal  of  such  great  powers  and  special  privi 
leges  upon  corporations  presented  the  alternative  of  utter  fi 
nancial  ruin,  or  united  and  combined  efforts  on  the  part  of  the 
people,  to  check  the  great  and  growing  power  which  now  is 
fattening  upon  their  toil  and  industry.  While  under  ordinary 
circumstances,  all  class  organizations  are  attended  with  some 
bad  results,  yet  when  any  interest  becomes  so  powerful  as  to 
oppress  all  others,  when  it  has  such  strength  that  it  can  defy 
all  ordinary  attempts  at  reform,  then  any  and  all  organiza 
tions  having  for  their  object  the  correction  of  abuses,  the  res 
toration  of  the  rights  of  the  people,  the  destruction  of  an  oli 
garchy  that  has  already  obtained  such  power  in  the  land  as  to 
subvert  the  very  nature  of  free  institutions,  is  not  only  right, 
but  its  objects  are  patriotic.  Though  the  organization  may 
have  for  its  object  the  protection  of  a  single  interest,  the  cor 
rection  of  a  single  abuse,  the  restoration  of  a  single  right,  it 
benefits  all  classes  who  suffer  like  oppressions.  It  is  fortunate 
that  while  the  grants  of  great  bounties  and  special  privileges 
to  corporations  have  resulted  in  great  wrongs  and  oppressions 
to  the  people  generally,  they  have  also  been  the  means  of 
effecting  organizations  that  will  eventually  restore  to  the  peo 
ple  those  rights  which  in  our  government  are  considered  as 
inalienable.  When  the  agriculturalists  of  the  whole  country 
become  united  in  their  demands  for  redress,  neither  the  state 
legislatures,  the  congress  of  the  nation,  or  the  courts,  will  dare 
to  disregard  their  demands.  Numbering  more  than  all  who 
are  engaged  in  other  pursuits,  being  a  majority  of  the  whole 
people,  when  their  united  voice  is  heard  it  will  not  be  an  "un 
certain  sound."  It  will  command  obedience*  Grants  of  boun- 


CONCLUSION.  251 

ties  and  privileges  to  corporations  have  depressed  and  some 
times  destroyed  other  great  interests  to  the  injury  of  the  peo 
ple,  and  divided  the  people  into  classes,  one  class  representing 
the  capital  and  corporate  interests  of  the  country,  and  the  oth 
er,  comprised  of  the  laboring  and  producing  classes;  but  this 
special  legislation  has  also  resulted  in  bringing  to  the  front 
the  great  agricultural  population,  who  possess  the  power,  by 
united  action,  of  restoring  to  the  people  their  lost  rights,  while 
corporations  shall  enjoy  equal  rights  with  other  interests,  shorn 
of  their  power  granted  to  them  by  corrupt  and  interested  leg 
islation  and  partial  decisions  of  courts.  This  legislation  and 
these  decisions  we  have  reviewed  in  preceding  pages.  It  now 
remains  for  us  to  express  our  views  upon  the  policy  rendered 
necessary  by  the  grave  situation  of  the  country. 

SECOND. —  The  Constitutional  Eight  and  Duty  testing  upon  the 
People  to  Repeal  all  Class  Legislation. — While  we  do  not  claim 
to  possess  more  knowledge  than  other  men,  and  while  our 
views  as  to  the  means  to  be  employed  for  remedying  the  evils 
under  which  we  now  suffer  may  be  erroneous,  we  shall  ven 
ture  to  present  them  with  the  hope  of  aiding  the  efforts  now 
being  made  to  arrest  the  rapid  concentration  of  the  whole  po 
litical,  commercial,  and  financial  interests  of  the  country,  in 
corporations  and  other  monopolies.  We  must  not  lose  sight 
of  the  fact  that  under  our  constitution  the  people  are  sove 
reign;  that  the  will  of  the  majority  expressed  as  provided  by 
the  fundamental  law  is  supreme ;  that  all  the  rights,  privileges, 
and  powers  possessed  by  man  in  his  normal  state,  are  retained 
by  the  people,  save  such  as  they  have  transferred  to  the  differ 
ent  departments  of  the  government,  state  and  national ;  that 
these  rights,  not  so  transferred,  can  be  asserted  and  enforced 
as  occasion  requires ;  that  when  those  entrusted  with  the  ad 
ministration  of  the  government  transcend  or  abuse  the  pow 
ers  delegated  to  them,  and  by  so  doing  deprive  the  people  of 
the  rights  they  possess  under  the  constitution,  the  people  are 
fully  justified  in  resorting  to  whatever  means  may  be  necessa 
ry  for  the  restoration  and  protection  of  those  rights:  In  pur 
suing  these  necessary  measures  of  relief,  no  injury  is  done  to  a 
minority,  or  to  any  individual,  for  the  foundation  on  which  our 
republic  rests  is  equal  and  exact  justice  to  all  men,  and  the 


252  MONOPOLIES   AND   THE    PEOPLE. 

equality  of  all  men  before  the  law.  All  acts  of  legislatures, 
and  all  decisions  of  courts,  which  deny  to  the  citizen,  or  to 
any  class  of  citizens,  or  to  a  particular  trade,  occupation,  busi 
ness,  or  profession,  the  same  privileges  and  protection  granted 
to  others,  or  which  grant  to  any  class  of  citizens  or  to  corpora 
tions  privileges  which  infringe  upon  the  rights  of  others,  are 
abuses  of  power  and  assumptions  of  authority  not  delegated 
by  the  people  to  the  government,  or  to  any  department  of  it. 
It  follows  that  any  attempts  of  congress  or  legislatures  to  con 
fer  upon  any  corporations  grants  of  power  which  enable  them 
to  override  the  rights  reserved  by  the  people,  transcend  the 
authority  with  which  such  legislatures  are  clothed,  and  are 
not  binding  upon  the  public.  As  agents,  they  have  exceeded 
their  power,  and  their  acts  do  not  bind  their  principals.  If  an 
agent  acts  under  special  authority,  his  acts,  within  the  scope 
of  his  authority,  are  binding  upon  his  principal ;  but  if  he  vio 
lates  his  instructions,  and  attempts  to  make  a  contract  not 
warranted  by  his  letter  of  attorney,  his  acts  have  no  binding 
force  upon  his  principal.  The  same  is  true  of  those  men  who 
are  elected  and  appointed  to  fill  the  different  offices  in  the 
government.  The  constitution  is  their  letter  of  attorney.  They 
are  bound  by  it.  When  they  act  outside  of  their  instructions, 
as  contained  in  that  instrument,  their  acts  are  void.  This  will 
be  conceded.  Even  members  of  railroad  companies  will  not 
controvert  this  proposition.  The  real  point  is,  Who  is  to  de 
cide  when  an  act  is  in  conflict  with  the  constitution  ?  The 
answer  is,  the  courts,  for  such  is  the  law.  When  complaint  is 
made  of  usurpations  of  corporations,  we  are  told  that  they  are 
only  exercising  the  privileges  conferred  upon  them  by  law ; 
that  the  courts  have  decided  in  their  favor,  and  that  from  these 
decisions  there  is  no  appeal ;  nor  can  any  redress  be  obtained, 
because  the  question  has  been  settled  in  their  favor  by  the 
highest  power"  in  the  land  —  the  supreme  court  of  the  United 
States. 

To  this  general  rule  of  determining  controverted  questions 
there  must  be  some  exceptions,  unless  we  concede  that  su 
preme  power  is  vested  in  the  courts,  and  that  the  constitution 
clothes  them  with  all  the  attributes  of  despotic  governments. 
We  have  shown  that  judges  of  courts  are  governed  and  con- 


CONCLUSION.  253 

trolled  by  the  same  influences  which  influence  other  men ; 
that  they  are  not  infallible ;  that  their  decisions  are  influenced 
by  surrounding  circumstances;  that  education,  association,  and 
habits  of  life,  have  an  important  bearing  upon  their  minds, 
and  not  unfrequently  warp  their  judgments,  and  it  is  not  trea 
son  to  say  that  decisions  of  state  and  federal  courts  prove  that 
they  are  as  liable  to  change  their  views  as  are  the  majority  of 
the  people.  The  supreme  power  must  have  a  permanent  lodg 
ment  somewhere.  If  it  remains  with  the  people,  it  does  not 
vest  in  the  supreme  court,  and  that  court  is  but  the  agent  of 
the  people,  and  acts  for  them  when  it  decides  upon  the  validi 
ty  of  a  statute,  or  defines  the  rights  and  duties  of  the  people. 
Under  our  form  of  government,  certain  rights  and  powers  are 
conferred  upon  the  general  government ;  these  are  all  such  as 
are  necessary  for  our  existence  as  a  nation ;  they  are  limited, 
and  should  be  strictly  construed,  because  all  powers  and 
rights  not  expressly  conferred  upon  the  general  government, 
"are  reserved  to  the  states  or  to  the  people."  The  states 
being  sovereign,  their  power  is  superior  to  that  of  the  general 
government,  save  in  those  matters  surrendered  to  it.  Hence, 
the  state  governments  have  a  general,  expressed,  and  implied 
jurisdiction  in  all  matters  not  surrendered,  and  state  constitu 
tions  are  to  be  liberally  construed. 

But  over  and  above  the  powers  vested  in  the  general  and  state 
governments,  that  God-given  right  of  self-protection  remains 
with  the  people.  This  right  they  have  never  surrendered  to  leg 
islatures  or  to  courts.  If  by  the  action  of  the  legislature,  or  of 
congress,  or  of  the  courts,  the  rights  reserved  to  the  people  can 
be  abridged,  denied,  or  destroyed,  then  we  do  not  live  under  a 
republican,  but  are  the  subjects  of  a  despotic,  government. 
If  congress  were  to  enact  a  law  providing  that  one-tenth  of  the 
annual  income  of  each  inhabitant  in  the  land  should  be  paid 
to  railroad  corporations,  and  the  supreme  court  of  the  United 
States  should  decide  the  act  to  be  constitutional,  if  it  be  true 
that  there  is  no  appeal  from  these  decisions,  and  that  as  good 
citizens  of  the  government  we  are  obliged  to  accept  them  as 
valid  and  binding,  there  could  be  no  redress.  This  doctrine 
of  submission  we  do  not  indorse.  Such  a  decision  would 
cause  the  people  to  resort  to  the  powers  and  rights  retained  by 


254  MONOPOLIES    AND   THE    PEOPLE. 

them,  and  to  make  use  of  whatever  means  they  possessed  to 
reverse  or  destroy  the  force  and  effect  of  such  a  decision.  They 
would  be  justified  in  resorting  to  nature's  first  law  to  rid  them 
selves  of  so  unjust  a  decision.  While  no  such  law  has  been 
passed,  and  no  such  decision  has  been  made,  laws  have  been 
enacted,  and  their  validity  affirmed  by  the  courts,  which  are 
paving  the  way  for  the  destruction  of  the  civil  and  political 
rights  of  the  people,  and  the  centralization  of  all  power  in  the 
general  government.  By  a  series  of  legislative  enactments  and 
decisions  of  courts,  special  privileges  have  been  conferred 
upon  railroad  companies  antagonistic  to,  and  destructive  of, 
the  rights  of  the  people.  How  are  these  rights  to  be  restored  ? 
These  questions  will  now  claim  our  attention. 

All  laws  granting  to  railroad  or  other  corporations  organ 
ized  for  pecuniary  profit,  special  and  exclusive  privileges, 
which  encroach  upon  the  rights  of  the  public,  should  be  re 
pealed.  The  most  prominent  argument  against  repeal  exists 
in  the  doctrine  that  railroads  are  public  highways,  and  that  a 
charter  granted  to  a  railroad  corporation  by  the  legislature  is 
in  the  nature  of  a  contract,  and  is  therefore  irrepealable.  By 
the  constant  and  persistent  assertion  of  these  propositions,  and 
by  frequent  adjudication  of  the  questions,  candor  compels  us 
to  admit  that  the  current  of  judicial  decisions  supports  this 
doctrine.  Yet  as  the  ancient  dogma  of  tyrants,  "  The  king 
can  do  no  wrong,"  does  not  obtain  in  this  country,  we  beg 
leave  to  call  in  question  the  soundness  of  this  doctrine.  If 
railroads  are  public  highways,  there  can  be  no  question  as  to 
the  right  of  legislatures  to  exercise  the  same  control  over  them 
that  they  assert  in  regard  to  common  public  roads.  If  they  are 
public,  private  parties  cannot  have  the  exclusive  control  of  them ; 
nor  can  the  legislature  grant  away  the  rights  of  the  public  by  ex 
clusive  charters  to  private  parties,  for  the  reason  that  the  leg 
islature  (the  department  of  government  that  enacts  all  stat 
utes)  cannot,  by  the  enactment  of  a  statute,  take  from  the 
whole  people  one  of  the  rights  belonging  to  them  and  confer 
it  upon  a  private  corporation.  The  legislature  has  no  power 
to  enact  a  statute  declaring  a  foundry,  or  mill,  built  by  an  in 
dividual  or  a  company  with  private  capital  (the  absolute  title 
vesting  in  such  party)  to  be  a  public  foundry  or  mill.  If  such 


CONCLUSION.  255 

a  statute  were  enacted,  it  would  not  change  the  title  to  the 
property,  nor  would  it  prevent  the  owner  from  using  and  en 
joying  it  as  his  own,  exclusively.  Whether  it  be  called  public 
or  private  would  not  change  the  nature  of  the  ownership  or 
convert  the  interest  into  public  property.  No  matter  by  what 
name  it  might  be  called,  it  is  still  private  property.  The  same 
is  true  of  railroads.  They  are  built  and  owned  by  private  cor 
porations  ;  are  under  the  control  of  their  owners,  who  retain 
for  their  own  use  the  earnings  of  their  roads.  If  these  roads 
are  public  highways,  then  the  legislature,  acting  for  the  public 
good,  occupies  the  anomalous  position  of  granting  charters  to 
private  parties  to  construct  public  highways,  and  to  own  them 
after  their  construction.  The  supreme  court  of  the  United 
States,  and  the  courts  of  some  of  the  states,  have  decided  that 
they  are  public  highways,  and,  according  to  the  usual  custom, 
these  decisions  are  to  be  received  as  final. 

The  courts  having  declared  them  public  corporations  does 
not  change  the  facts  in  the  case.  The  facts  still  remain.  The 
roads  are  owned  and  controlled  by  private  corporations.  The 
title  cannot  be  taken  from  them  arbitrarily.  The  companies 
receive  the  earnings  of  the  roads,  and  every  fact  contradicts 
the  decision  of  the  courts.  If  the  courts  were  to  decide  that 
a  crow  was  white  and  not  black,  we  would  acknowledge  the 
binding  force  of  the  decision,  and  admit,  that  by  virtue  of  the 
decision,  the  crow  is  white.  But  when  we  look  at  the  fact,  we 
would  still  insist  that,  notwithstanding  the  decision  of  the 
courts,  the  crow  is  as  black  as  it  was  before  the  decision  was 
made.  If  the  courts  were  to  decide  that  common  highways 
were  railroads,  as  a  matter  of  law  we  would  accept  the  decis 
ion  as  final ;  but  as  a  matter  of  fact  we  would  know  that  they 
were  common  highways.  Railroads,  owned  and  controlled  by 
private  parties,  are  not  public  highways.  If  railroads  are  pub 
lic  highways,  then  the  other  position,  that  the  charters  granted 
to  railroad  companies  are  irrepealable,  is  not  tenable — for  the 
reason  that  the  legislature  possesses  full  power  to  alter,  amend, 
or  repeal  all  laws  enacted  for  the  benefit  of  the  public.  Pub 
lic  highways  are  public  property  as  much  as  public  buildings, 
court-houses,  school  houses,  asylums,  and  other  institutions 
created  for  the  use  and  benefit  of  the  public.  The  legislature 


256  MONOPOLIES  AND  THE   PEOPLE. 

does  not  possess  the  power  to  vest  in  a  company  the  exclusive 
right  to  build  and  own  any  of  these  public  buildings.  If  a 
charter  were  granted  for  any  such  purpose,  it  could  not  be 
claimed  that  it  was  in  the  nature  of  a  contract  between  the 
state  and  the  company,  absolutely  binding  upon  all  future  leg 
islation  ;  that  the  company  had  acquired,  by  virtue  of  its  char 
ter,  rights  that  neither  courts  nor  future  legislatures  could  dis 
turb.  Or  suppose  that  a  private  company  should  obtain  a 
charter  for  constructing  and  owning  all  the  highways  within  a 
certain  township  or  county,  would  it  be  contended  that  future 
legislatures  could  not  alter  or  repeal  the  charter  ?  If  railroads 
are  public  highways,  the  companies  constructing  them  must 
be  subject  to  the  same  laws  and  decisions  that  apply  to  all 
other  matters  of  like  public  character.  Their  charters  are  at 
all  times  under  the  control  of  the  legislative  authority,  and 
subject  to  be  altered,  amended,  or  repealed.  Being  the  com 
ponent  part  of  the  government,  of  a  public  nature,  the  doctrine 
that  private  parties  can  acquire  rights  in  the  nature  of  a  con 
tract  that  cannot  be  disturbed  without  their  consent  is  not  ten 
able.  Whether  railroads  are  to  be  considered  as  private  prop 
erty,  or  as  public  highways,  they  are  subject  to  the  control  of 
the  legislature  —  because,  under  the  constitution,  the  power 
to  create  corporations  by  charter,  with  absolute  powers, 
does  not  exist.  If  the  converse  of  this  is  true,  then  leg 
islatures  could,  by  conferring  special  privileges  upon  in 
dividuals  and  corporations,  deprive  the  public  of  all  attri 
butes  of  sovereignty,  and  place  the  entire  government  in  the 
hands  of  individuals  and  companies.  The  constitution  has 
conferred  no  such  power  upon  any  department  of  the  govern 
ment.  If  such  power  is  conferred,  the  constitution,  instead  of 
being  the  paramount  law  as  intended — establishing  the  rights 
of  the  people,  controlling  legislative  enactments,  defining  the 
powers  of  the  different  departments  of  the  government,  and 
guaranteeing  protection  from  unjust  and  oppressive  laws,  and 
decisions  of  courts — is  instead  but  an  instrument  to  be  used 
for  the  enslavement  of  the  people.  The  power  to  grant  to 
private  parties  a  monopoly  of  any  of  the  rights  belonging  to 
the  whole  people,  or  to  confer  upon  these  private  parties  such 
exclusive  privileges  as  will  infringe  upon  or  take  from  the 


CONCLUSION.  257 

public,  the  rights  that  naturally  attach,  or  belong  to,  the  whole 
people,  was  never  conferred  upon  the  legislature  of  the  state 
or  nation.  If  legislatures  have  entered  into  contracts  with 
corporations,  under  which  the  rights  belonging  to  the  people 
are  transferred  to  such  corporations,  they  have  exceeded  the 
power  vested  in  them,  and  the  charters  granted,  so  far  as  they 
infringe  upon  the  rights  of  the  public,  are  null  and  void.  The 
plea,  that  a  repeal  or  amendment  of  such  charters  would  de 
stroy  vested  rights,  has  no  force,  because  the  power  to  make 
such  grants  or  contracts  is  wanting.  Nor  does  the  plea,  that 
innocent  third  parties  would  suffer,  add  any  strength  to  the 
position.  The  corporations  are  the  parties  with  whom  these 
innocent  parties  contract,  and  to  whom  they  must  look  for  the 
,  fulfillment  of  their  contracts.  All  acts  of  legislatures,  grant 
ing  to  railroad  or  other  corporations,  rights  belonging  to  the 
whole  people,  are  subject  to  the  control  of  future  legislatures, 
and  are  repealable.  The  only  purpose  for  which  a  railroad 
charterTshould  be  granted  is  to  subserve  the  public  interest. 
For  this  purpose  the  legislatures  possess  the  power  to  confer 
upon  corporations  such  rights  and  privileges  as  are  necessary 
to  enable  them  to  have  continued  being,  and  to  transact  busi 
ness,  but  reserving  at  all  times  the  right  to  control  them  and 
reform  abuses.  Good  faith  on  the  part  of  railroad  companies 
requires  of  them  fair  and  honest  dealing  with  the  people. 
Adopting  the  idea  that  the  public  was  to  receive  great  benefit 
from  the  construction  of  railroads,  large  grants  of  lands,  sub 
sidy  bonds,  local  municipal  subscriptions,  donations  of  money, 
and  direct  taxation,  in  different  localities,  have  been  afforded 
the  different  companies  for  the  purpose  of  aiding  in  the  con 
struction  of  their  roads.  The  benefit  the  public  was  to  receive, 
and  which  the  companies  agreed  to  afford,  was  the  only  con 
sideration  expected  by  the  people.  This  consideration  the 
public  has  never  received.  We  have  shown  the  course  pur 
sued  by  railroad  companies,  in  constructing  their  roads,  water 
ing  their  stock,  and  selling  their  bonds,  and  the  oppressions 
practiced  by  them  to  force  from  the  people  the  means  for  de 
claring  dividends  on  fictitious  stock,  and  to  pay  the  interest  on 
the  immense  amounts  of  bonds  issued  and  sold  to  the  differ 
ent  corporations.  Assuming  that  their  charters  are  contracts 
32 


258  MONOPOLIES   AND   THE   PEOPLE. 

between  themselves  and  the  states,  they  defy  all  efforts  made 
by  the  people  to  arrest  their  extortions.  Our  goverment  be 
ing  instituted  for  the  protection  and  benefit  of  the  whole  peo 
ple,  they  possess  the  power,  and  it  is  their  right,  to  amend  or 
repeal  all  laws  that  deny  or  abridge  their  own  rights.  Railroad 
companies  should  be  compelled  to  reduce  their  stock  to  the 
actual  cost  of  constructing  their  roads,  and  the  rates  of  charges 
for  the  transportation  of  freights  and  passengers  should  be 
fixed  by  statute  at  such  rates  as  would  afford  a  fair  dividend 
upon  the  capital  actually  invested.  The  public  should  not  be 
compelled  to  pay  interest  or  dividends  on  stock  or  bonds  issued 
in  excess  of  the  actual  cost  of  the  roads.  The  property  of  rail 
road  companies  should  be  taxed  by  the  same  rules,  and  at  the 
same  rate,  as  the  property  of  individuals.  A  general  super 
vision  of  all  railroad  corporations  throughout  the  country 
should  be  exercised  by  the  respective  state  authorities.  It  may 
be  said :  "All  this  is  proper,  but  how  will  you  accomplish  it  ? 
All  efforts  heretofore  made  in  that  direction  have  been  defeated 
in  the  different  legislative  bodies,  or  by  the  decisions  of  the 
courts."  We  are  compelled  to  admit  that  if  future  attempts 
at  reform  are  to  be  measured  by  past  efforts,  the  prospect  is 
not  flattering.  When  relief  bills  have  been  introduced  into 
legislative  bodies  they  have  generally  failed.  Railroad  men 
have  been  able  to  defeat  almost  every  attempt  at  reform.  The 
idea  seems  to  have  obtained  in  all  legislative  bodies  that  the 
men  who  built  railroads  were  self-denying;  that  they  were 
philanthropists ;  that  for  the  purpose  of'  developing  the  coun 
try,  of  affording  speedy  and  cheap  transportation  to  the  east 
ern  markets  of  the  products  of  the  west,  they  were  sacrificing 
their  personal  comfort  and  wealth ;  and  that  the  least  the  peo 
ple  could  do  was  to  extend  to  them  a  helping  hand  —  to  grant 
them  local  aid,  to  exempt  them  from  taxes,  to  assist  them  in 
procuring  the  right  of  way,  and,  instead  of  enacting  laws  to 
protect  the  people  from  the  abuses  of  railroad  corporations, 
statutes  should  be  enacted  to  prevent  any  interference  with  the 
corporations,  and  allowing  them  extraordinary  privileges. 
Men  who  were  elected  to  the  legislature  under  pledges  to  fa 
vor  the  passage  of  statutes  for  the  protection  of  the  people 
against  the  encroachments  of  corporations,  were  found  enlisted 


CONCLUSION.  259 

in  their  favor,  and  these  monopolies,  instead  of  being  restricted 
in  their  powers,  have  continually  received  additional  favors 
and  privileges. 

When  the  people  have  appealed  to  the  courts  for  redress, 
they  have  met  with  defeat.  Lengthy  decisions  have  been  writ 
ten  and  published,  setting  forth  the  great  benefit  of  railroads, 
instructing  the  people  that  railroad  charters  are  contracts,  and 
that  unless  courts  decide  in  favor  of  railroad  companies  "inno 
cent  third  parties,"  who  have  purchased  railroad  bonds,  will 
sustain  loss.  Thus,  through  the  legislative  and  judicial  depart 
ments  of  the  government,  the  people  are  reduced  to  a  state  of 
vassalage,  with  railroad  corporations  as  their  masters  and 
rulers. 

Notwithstanding  this  gloomy  outlook,  the  people  still  retain 
sufficient  power  to  correct  the  evil  and  to  recover  their  consti 
tutional  rights.  The  country  is  now  divided  into  two  parties. 
One  party  is  composed  of  the  people,  strong  in  nothing  but 
numbers,  and  the  determination  to  battle  for  their  rights.  The 
other  side  is  composed  of  corporations,  stock-jobbers,  brokers, 
and  capitalists,  whose  strength  consists  in  the  organization  and 
consolidation  of  their  interests,  their  control  of  the  finances  of 
the  country,  and  of  the  different  departments  of  the  govern 
ment.  The  lines  dividing  these  parties  are  clearly  and  dis 
tinctly  marked.  Their  interests  are  conflicting.  The  people 
now  demand  such  legal  enactments  as  will  restrict  extortionate 
charges  by  railroad  companies,  and  compel  them  to  pay  their 
just  share  of  taxes  for  the  support  of  the  government.  Legis 
lators  being  elected  for  short  terms,  being  frequently  called  up 
on  to  render  an  account  of  their  official  acts  to  their  constitu 
ents,  if  the  people  are  united  and  persistent,  it  will  not  be 
difficult  to  procure  the  passage  of  such  statutes  as  will  compel 
railroad  companies  to  deal  fairly  and  honestly  with  the  public. 
To  effect  reform,  and  obtain  redress,  the  aid  of  another  de 
partment  of  the  government  must  be  obtained,  to-wit:  the 
courts  of  the  country. 

THIRD. —  The  People  have  a  Precedent  for  a  Pledged  Judiciary. 
In  treating  of  the  courts  and  their  decisions,  we  are  venturing 
upon  grounds  that  will  subject  us  to  criticism.  The  decision 
of  a  court  of  last  resort  upon  controverted  questions  is  gener- 


260  MONOPOLIES   AND   THE    PEOPLE. 

ally  received  as  final.  In  questions  of  constitutional  law,  or 
when  the  rights  of  the  public  or  of  private  parties  are  involved, 
the  final  decisions  of  our  highest  tribunal  are  accepted  by  gen 
eral  consent,  as  the  supreme  law  of  the  land. 

We  look  upon  the  judges  of  courts  as  men  possessing  supe 
rior  legal  sagacity,  and  upon  their  decisions  as  embodying  the 
highest  wisdom.  The  congress  of  the  nation,  or  the  legisla 
tures  of  states,  composed  in  part,  at  least,  of  men  of  extensive 
legal  knowledge,  who  have  made  the  science  of  government  a 
life  long  study ;  who  have  carefully  and  critically  examined 
the  provisions  of  the  constitution :  who  have  full  knowledge 
of  the  mischief  to  be  remedied,  or  the  rights  to  be  enforced, 
carefully  digest,  prepare,  and  after  full  discussion  in  their  re 
spective  bodies,  enact  a  law  which  they  believe  will  accom 
plish  the  intended  purpose,  and  at  the  same  time  contravene 
no  provision  of  the  constitution.  An  attempt  is  made  to  en 
force  the  law,  and  a  question  arises  as  to  its  constitutionality, 
or  its  meaning  and  effects.  The  court  is  appealed  to.  On 
this  bench  are  sitting  three,  five,  seven,  or  more  judges.  Af 
ter  argument,  this  court,  by  a  majority  of  one,  decides  the  law 
unconstitutional,  giving  to  it  an  interpretation  which  defeats 
the  object  for  which  it  was  enacted.  The  minority  of  the 
court  dissent  from  the  opinion  of  the  majority,  and  set  forth 
at  length  the  reasons  for  such  dissent.  The  fact  that  five 
judges  concur  in  the  majority  opinion  and  four  dissent  makes 
the  decision  of  one  man  the  supreme  law  of  the  land.  It  annuls 
acts  of  congress  and  state  legislatures,  and  makes  the  opinions 
and  decisions  of  four  members  of  the  court  concurring  with  a 
majority  of  congress  of  no  avail.  One  man's  opinion  is  the 
law  for  the  whole  people.  This  we  have  shown  in  the  action 
of  the  supreme  court  in  the  legal  tender  cases.  Now  it  is  not 
considered  out  of  place  to  criticise  the  acts  of  congress  or  of 
legislatures,  or  the  motives  and  influences  that  govern  and 
control  those  bodies  in  the  enactment  of  laws ;  yet  it  is  looked 
upon  as  almost  treasonable  to  refuse  to  accept  the  decisions  of 
courts  as  good  law,  or  to  discuss  the  motives  and  influences 
leading  to  these  decisions.  In  1869  the  supreme  court  of  the 
United  States,  by  a  majority  of  one  judge,  decided  that  treas 
ury  notes  were  not  legal  tender  for  pre-existing  debts.  In 


CONCLUSION.  261 

1871  the  same  court,  by  a  majority  of  one,  decided  that  they 
were  a  legal  tender  for  all  debts,  public  or  private,  save  when 
there  were  special  exceptions.  So  in  other  questions  in  the 
United  States  courts,  and  in  the  courts  of  the  states,  it  has 
sometimes  happened  that  the  law  of  the  land  has  been  changed 
by  the  change  of  one  or  two  judges.  In  Iowa  this  is  demon 
strated  in  the  decisions  of  the  supreme  court  upon  the  ques 
tions  whether  the  legislature  could  authorize  the  levy  and  col 
lection  of  a  special  tax  to  aid  in  the  construction  of  railroads. 
We  refer^to  these  matters  to  show  that  judges  are  not  infalli 
ble,  and  that  sitting  as  courts,  they  are  apt  to  differ  as  to  the 
law  and  facts  of  the  case.  Instances  are  not  wanting  when 
judges  have  been  appointed  and  elected  because  of  their  views 
upon  certain  questions,  and  when  with  the  changes  of  the 
personnel  of  the  court,  its  final  decisions  have  been  reversed, 
thus  making  the  supreme  law  of  the  land  depend  upon  the 
election  or  appointment  of  one  man  to  the  bench.  The  argu 
ment  to  be  drawn  from  this  is,  that  no  such  sanctity  surrounds 
the  court  or  judges  as  forbids  a  scrutiny  of  their  decisions  or 
the  motives  prompting  them.  But  it  is  said,  if  you  discuss 
the  motives  underlying  judicial  decisions,  you  will  debase  the 
judiciary  of  the  country;  that  candidates  for  the  bench,  like 
those  for  legislative  or  executive  offices,  will  be  selected  be 
cause  of  their  views  respecting  certain  interests  and  questions 
that  may  come  before  them  for  judicial  determination,  and, 
like  legislators  they  will  be  appointed  or  elected  because  these 
views  harmonize  with  those  of  certain  classes  or  interests. 
The  answer  to  this  is,  that  as  a  general  rule,  judges  are  now 
appointed  or  elected  because  of  their  political  views.  In  al 
most  every  instance  the  man  who  is  elected  or  appointed  ac 
cords  in  his  political  views  with  the  majority,  and  indeed,  men 
have  been  nominated  and  elected,  or  appointed,  as  judges  of 
courts  because  of  their  publicly  expressed  opinions  on  some 
particular  subject.  The  decisions  of  courts  upon  constitution 
al  and  other  questions  change  frequently.  The  most  impor 
tant  interests  and  rights  of  the  people  under  the  constitution 
and  laws  of  the  country  have  been  differently  decided  by  the 
same  court  of  last  resort  in  both  national  and  state  tribunals. 
The  constitution  has  been  declared  to  mean  one  thing  at  one 


262  MONOPOLIES   AND   THE   PEOPLE. 

time,  and  a  directly  opposite  meaning  has  been  given  to  the 
same  clause  at  another  term  of  the  same  court,  with  but  a  few 
months  intervening.  An  elasticity  has  been  given  this  instru 
ment  neither  contemplated  by  its  framers,  nor  calculated  to  in 
crease  respect  for  it,  or  for  the  judiciary  of  the  country.  "While 
we  would  not  advocate  the  policy  of  candidates  for  judicial 
offices  pledging  themselves  upon  any  question  that  may  come 
before  them  for  a  decision,  we  claim  that  the  people  should 
exact  from  every  candidate  a  pledge  to  "  support,  protect,  and 
defend  the  constitution,"  to  abstain  from  the  dangerous  prac 
tice  which  now  obtains  of  construing  the  fundamental  law  of 
the  land  in  favor  of  particular  interests,  and  to  abstain  from 
judicial  legislation.  More  danger  to  the  liberties  of  the  peo 
ple  is  to  be  apprehended  from  the  courts,  than  from  any 
other  source.  The  constitution  is  inelastic,  unchangeable,  save 
by  amendment  in  the  manner  provided.  No  court  should  dis 
regard  it,  nor  warp  its  meaning.  If  the  rules  of  construction 
practiced  of  late  are  to  be  continued,  its  sanctity  is  destroyed, 
and  its  provisions  are  no  more  binding  than  those  of  a  statute. 
It  is  the  duty  of  courts  to  interpret  the  constitution,  but  not  to 
supply  its  (to  them)  seeming  defects,  or  to  override  its  plain 
provisions.  We  all  feel  a  deep  interest  in  the  election  of  leg 
islators,  for  the  reason  that  all  are  to  be  affected  by  the  laws 
enacted,  but  we  seem  not  to  realize  to  its  full  importance  the 
fact  that  all  laws  passed  by  congress  or  a  state  legislature  are 
liable  to  be  declared  null  and  void  by  the  courts ;  that  the  in 
terpretation  and  construction  of  statutes  belong  exclusively  to 
the  courts ;  that  the  men  elected  to  judicial  positions,  under 
the  constitution,  are  clothed  with  a  power  superior  to  that  of 
the  legislative  and  executive  departments  of  the  government; 
that  by  a  single  decision  the  supreme  court  of  the  state,  or  of 
the  nation,  can  suspend  or  annul  a  statute  which  has  been  in 
force  for  years,  or  that  an  interpretation  of  the  constitution, 
long  acquiesced  in,  can  be  reversed  and  a  new  meaning  given 
to  it.  Yet  these  are  facts,  and  from  these  decisions  there  is 
no  appeal.  The  courts  may  change  their  opinions  upon  con 
stitutional  questions  at  every  term,  and  the  nation  must  re 
ceive  their  decisions  as  the  supreme  law. 


CONCLUSION.  263 

We  have  said  that  the  constitution  is  inelastic.  It  must  re 
main  so  for  the  protection  of  the  rights  of  the  people.  If 
courts  can  change  its  meaning  as  occasion  requires,  the  will  of 
the  court  and  not  the  constitution,  is  the  supreme  law  of  the 
land.  The  decisions  of  courts,  in  the  recent  conflicts  between 
railroad  corporations  and  the  people,  and  upon  the  legal  tender 
question,  demonstrate  that  the  will  of  the  court  is  already  the 
supreme  law  of  the  land.  One  of  the  questions  in  the  deter 
mination  of  which  the  courts  have  substituted  their  will  for  con 
stitutional  law,  relates  to  the  authority  of  state  governments  to 
aid  in  the  construction  of  railroads.  The  constitution  of  Iowa 
prohibits  the  state  from  participating  in  or  becoming  a  stock 
holder  in  any  private  corporation  or  an^  corporation  created  for 
profit.  Counties  are,  necessarily,  a  part  of  the  government ; 
their  creation  and  organization  are  a  necessity  in  the  adminis 
tration  of  the  state  government.  While  the  state  is  prohibited 
from  aiding  in  the  construction  of  railroads,  the  courts  have  said 
that  the  constitution  does  not  prohibit  counties  from  subscrib 
ing  stock  to  railroad  corporations  and  creating  onerous  debts 
in  payment  therefor.  In  other  words,  while  the  constitution 
forbids  any  participation  on  the  part  of  the  state,  as  a  state,  in 
the  construction  of  railroads,  it  is  no  violation  of  the  funda 
mental  law  for  the  inferior  branches  of  the  state  government 
to  become  stockholders  in  the  same  corporations.  Though 
the  whole  state  is  forbidden  to  aid  in  the  construction  of  rail 
roads,  by  dividing  the  state  into  counties,  it  is  no  violation  of 
the  fundamental  law  for  these  counties  to  aid  in  their  construc 
tion.  No  one  doubts  that  it  was  the  intention  of  the  framers 
of  the  constitution  to  protect  the  people  against  the  evils  of 
oppressive  burdens  always  resulting  from  a  participation  of 
the  public  authorities  in  the  construction  of  railroads.  The 
question  of  the  authority  of  counties  to  subscribe  stock  to  rail 
roads,  in  Iowa,  has  often  been  before  the  courts.  The  decisions 
have  been  numerous,  but  not  unanimous  or  uniform.  At  no 
time  has  the  supreme  court  of  the  state  by  unanimous  decision 
held  that  the  power  existed ;  but  on  several  occasions  the 
court  has  united  in  deciding  that  the  power  did  not  exist,  the 
constitutionality  of  such  right  depending  entirely  upon  who  were 
elected  judges.  Thus  the  fundamental  law,  which  can  only  be 


264  MONOPOLIES   AND   THE    PEOPLE. 

changed  by  amendment  in  the  manner  provided,  has  been  held 
to  permit  or  forbid  public  aid  in  building  railroads,  as  suited 
the  peculiar  views  of  the  men  who  had  been  elected  judges. 
What  was  constitutional  one  day  was  unconstitutional  the  next. 
The  decision  of  the  men  who  happened  to  occupy  seats  upon 
the  supreme  bench,  has  been  the  supreme  law,  and  not  the 
constitution.  On  the  question  of  voting  local  aid  to  railroads 
the  supreme  court  decided  that  the  act  of  the  legislature 
authorizing  such  aid  was  unconstitutional.  In  one  year  from 
that  time  the  same  supreme  court,  three  judges  concurring, 
decided  that  the  law  was  constitutional,  the  reason  of  this  va 
riance  being  that  in  the  interim  two  judges  had  retired  from 
the-bench  and  two  new  ones  been  elected  in  their  place.  Here, 
again,  the  will  of  the  men  who  happened  to  be  elected  changed 
the  meaning  of  the  constitution.  The  same  curious  history 
has  been  enacted  in  many  other  states.  When  men  who  are 
interested  in  railroads,  or  who  desire  that  the  public  should 
aid  in  their  construction,  occupy  seats  on  the  bench  of  the  su 
preme  court,  the  constitution  is  construed  to  allow  such  aid, 
and  where  the  judges  are  opposed  to  the  allowance  of  such 
aid,  they  decide  the  constitution  does  not  authorize,  but  for 
bids  it.  In  each  case  the  fundamental  law  is  interpreted  to 
suit  the  peculiar  views  of  the  judges  who  occupy  the  bench, 
until  it  has  ceased  to  have  any  binding  effect.  With  this  state 
of  facts,  known  to  all  men,  it  is  not  strange  that  the  people 
now  demand  pledges  from  men  who  aspire  to  judicial  station. 
When  state  constitutions  are  made  to  mean  anything  or  noth 
ing,  as  suits  the  men  whose  duty  it  is  to  interpret  them,  and 
when  laws  are  pronounced  constitutional  or  unconstitutional, 
as  caprice  or  the  interests  of  corporations  may  prompt,  "  na 
ture's  first  law,  self-preservation,"  demands  that  those  who 
aspire  to  become  judges  of  courts  should  be  controlled  by 
the  constitution  rather  than  by  their  personal  views  as  to  what 
it  should  be ;  and  that  they  should  be  fully  committed  and 
pledged  to  abstain  from  judicial  constructions  of  the  constitu 
tion  which  abridge  the  rights  of  the  people  and  increase  the 
power  of  corporations.  While  the  decisions  of  the  state  courts 
have  tended  to  abridge  the  rights  of  the  people  and  increase 
the  already  too  great  power  of  corporations ;  while  they  have, 


CONCLUSION.  265 

in  fact,  decided  that,  under  the  constitution,  a  citizen  can  be 
compelled  to  bestow  a  part  of  what  he  possesses  upon  railroad 
corporations  without  an  equivalent,  the  greatest  danger  to  the 
liberties  of  the  people  and  the  perpetuity  of  republican  gov 
ernment  is  to  be  apprehended  from  the  supreme  court  of  the 
United  States.  It  possesses,  under  the  constitution,  unlimited 
jurisdiction  upon  all  matters  arising  under  the  constitution  and 
laws  of  the  United  States,  but  not  the  same  general  jurisdic 
tion  that  appertains  to  state  tribunals.  Yet,  as  under  the  con 
stitution  it  is  a  court  of  last  resort,  and  its  members  hold  their 
offices  for  life,  it  is  independent  of  the  people.  Not  only  so, 
but  it  cannot  be  called  to  an  account  by  any  department  of  the 
government,  state  or  national.  It  possesses  powers  superior 
to  all  other  departments  of  the  government ;  it  rises  above  all 
law,  and  becomes  a  law  in  itself.  Its  decisions  being  final,  the 
whole  people  must  accept  them  as  the  supreme  law  of  the 
land.  No  matter  how  oppressive,  or  unjust,  or  absurd,  the 
whole  government  and  people  must  accept  these  decisions  as 
the  highest  law  and  authority  in  the  land.  These  facts,  taken 
into  consideration  with  some  of  its  recent  decisions  in  favor  of 
railroad  corporations  and  other  monopolies,  raise  the  question 
whether  we  are  now  governed  by  constitutional  law  or  by  the 
edicts  of  the  supreme  court,  promulgated  in  the  guise  of  judi 
cial  decisions. 

Let  us  look  at  a  few  of  these  decisions,  now  in  full  force  as 
the  law  of  the  land.  In  the  construction  of  railroads,  counties, 
cities,  and  towns  have  assisted  by  subscribing  stock  and  levy 
ing  taxes  to  pay  such  subscription.  State  courts  have  decided 
that  under  the  constitution  and  laws  of  the  states  'such  sub 
scription  Avas  unconstitutional,  illegal,  and  void.  The  power 
to  afford  such  aid  to  railroad  companies  was  derived  from 
state  statutes,  passed  by  virtue  of  the  power  presumed  to  be 
conferred  by  the  constitution.  Following  precedents  which 
had  been  established  and  recognized  from  the  organization  of 
our  government,  the  decisions  of  the  state  courts  should  have 
been  final,  and  binding  upon  the  courts  of  the  nation.  Yet 
the  supreme  court  of  the  United  States,  by  a  bare  majority  of 
one,  in  violation  of  all  precedent,  assumed  power  not  conferred 
upon  it  by  the  constitution  of  the  United  States,  annulled  state 
33 


266  MONOPOLIES   AND   THE    PEOPLE. 

constitutions,  disregarded  state  laws,  and  reversed  and  refused 
to  be  bound  by  the  decisions  of  state  courts.  The  will  of  one 
man,  who  happened  to  occupy  a  seat  upon  the  supreme  bench, 
is  made  the  supreme  law  of  the  land,  not  by  virtue  of  any  pro 
vision  of  the  constitution,  but  by  trampling  upon  the  rights  of 
states  and  the  people.  When  it  is  remembered  that  their  de 
cisions  were  made  in  favor  of  corporations,  and  that  their  effect 
was  to  compel  the  people  to  contribute  a  part  of  their  sub 
stance  to  help  build  up  and  strengthen  monopolies,  which 
have  proved  to  be  oppressive  task-masters,  we  are  justified  in 
saying  that  the  fundamental  law  of  the  land  has  been  misin 
terpreted  and  the  rights  of  the  people  sacrificed.  We  assert 
that  no  provision  of  the  constitution  can  be  shown  that  even 
indirectly  authorizes  taxation  to  aid  in  the  construction  of 
railroads  owned  by  private  corporations.  The  idea  is  at  war 
with  every  principle  of  right  and  justice.  When  the  supreme 
court  of  the  nation  assumed  to  decide  in  favor  of  such  author 
ity,  it  occupied  the  position  and  assumed  the  prerogative  of  an 
absolute  monarch.  The  supreme  court  of  the  United  States 
was  as  much  bound  by  the  decision  of  the  state  courts  upon 
questions  arising  under  state  constitutions  and  laws  as  were 
the  courts  of  the  states  by  the  decisions  of  the  federal  courts 
upon  questions  arising  under  the  constitution  and  statutes  of 
the  United  States.  The  adoption  of  a  different  rule  will  sub 
vert  the  principles  of  our  government,  and,  as  a  necessary  re 
sult,  the  will  of  the  supreme  court  will  become  the  supreme 
law  of  the  land. 

We  might  give  other  instances  wherein  the  federal  courts 
have  overridden  state  tribunals  without  warrant  of  law  and  in 
disregard  of  state  rights ;  but  we  pass  to  another  question 
which  is  now  engrossing  public  attention,  and  upon  which  the 
supreme  court  has  recently  made  a  decision.  The  question 
whether  railroad  corporations  are  public  or  private  has  been 
}>pforo  the  supreme  court.  The  court  has  passed  upon  it,  and 
decided  that  railroads  are  public  highways;  but  it  has  not  yet 
decided  that  railroad  corporations  are  public.  No  question 
connected  with  railroads  is  of  more  importance  to  the  people. 
If  they  are  public  highways,  then  the  legislatures  of  the  states 
have  full  control  of  them,  and  the  roads  are  as  much  a  part  of 


CONCLUSION.  267 

the  public  or  common  property  of  all  the  people,  to  be  used  as 
occasion  requires,  as  are  common  highways.  Then  the  right 
to  levy  and  collect  taxes  to  aid  in  their  construction,  or  to 
wholly  construct  them,  cannot  be  questioned.  The  supreme 
court  of  the  United  States,  in  a  very  recent  case~appealed  from 
the  state  of  Wisconsin,  has  decided  that,  for  the  purposes  of 
taxation,  railroads  are  public  highways.  The  opinion  was  de 
livered  by  Justice  Strong,  and  is  ingenious  as  well  as  unique. 
We  desire  to  call  the  reader's  attention  to  some  portions  of  it, 
for  the  purpose  of  showing  how  the  rights  of  the  people  are 
protected  by  the  judiciary  of  the  United  States.  The  opinion 
pronounced  by  Justice  Strong  fully  illustrates  the  fact  that  as 
sociation  and  education  will  influence  the  decisions  of  judges 
as  well  as  those  of  other  men ;  and  while  we  impute  no  im 
proper  motives  to  the  judiciary  of  the  nation,  we  say  that  this 
decision  disposes  of  some  of  the  rights  of  the  people,  supposed 
to  be  fully  protected  by  the  fundamental  law,  with  as  little 
hesitation  as  would  be  manifested  by  an  inferior  court  in  a 
case  involving  only  the  plainest  legal  points.  The  court  says  : 

"  The  legislature  cannot  create  a  public  debt,  or  levy  a  tax, 
or  authorize  a  municipal  corporation  to  do  so,  in  order  to  raise 
funds  for  a  mere  private  purpose.  It  cannot,  in  the  form  of  a 
tax,  take  the  money  of  a  citizen  and  give  it  to  an  individual, 
the  public  interest  or  welfare  being  in  no  way  connected  with 
the  transaction.  The  objects  for  which  money  is  raised  by 
taxation  must  be  public,  and  such  as  subserve  the  common  in 
terest  and  well-being  of  the  community  required  to  contrib 
ute." 

That  this  is  good  law,  all  will  admit;  but  what  shall  we 
say  of  the  following,  copied  from  the  same  opinion : 

"  To  justify  the  court  in  arresting  the  proceedings  and  de 
claring  the  tax  void,  the  absence  of  all  possible  public  interest  in 
the  purpose  for  which  the  funds  are  raised  must  be  clear  and 
palpable  —  so  clear  and  palpable  as  to  be  perceptible  by  every 
mind  at  the  first  blush." 

It  is  decided  by  the  supreme  court  of  the  United  States, 
that  if  there  is  any  "  possible  public  interest "  in  the  purposes 
for  which  a  tax  is  levied,  then  such  levy  of  tax  is  constitution 
al,  and  this  decision  is  to  be  received  as  the  supreme  law  of  the 


268  MONOPOLIES   AND   THE    PEOPLE. 

land.  Is  this  good  law  ¥  The  public  has  an  interest  in  toll- 
bridges,  plank  roads,  ferries,  manufacturing  companies,  and 
many  other  enterprises  prosecuted  and  controlled  by  private 
corporations  and  individuals  —  are  these  all  so  connected  with 
the  administration  of  the  government  as  to  be  proper  objects 
of  compulsory  contributions  for  their  support  ?  The  man  who 
crosses  the  bridge  pays  toll ;  the  party  driving  over  the  plank 
road  does  the  same  ;  the  ferryman  exacts  fare — and  all  receive 
it,  not  for  the  benefit  of  the  public,  but  for  their  own  private 
uses.  Yet  the  public  have  an  interest  in  them.  Are  they 
public  corporations  ?  Suppose  the  legislature  of  the  state 
should,  by  statute,  declare  them  public  corporations,  under 
what  provision  of  the  constitution  is  found  the  power  to  tax 
the  people  for  their  construction  while  they  are  owned  and 
controlled  by  private  parties  ?  Stage  coaches  and  steamboats 
are  owned  by  private  parties ;  they  are  common  carriers,  sub 
ject  to  be  regulated  and  controlled  by  law;  the  public  have  an 
interest  in  them ;  the  legislature  can  prescribe  rules  and  regu 
lations  to  be  observed  by  them  in  the  prosecution  of  their  bus 
iness  as  common  carriers.  Can  the  people  be  compelled  to 
pay  taxes  for  their  support  ?  No  distinction  exists  between 
common  carriers  by  water  or  by  land  over  ordinary  highways 
and  railroad  companies  as  to  their  rights  and  duties  when  the 
public  are  concerned,  except  that  railroads  cannot  be  built  until 
the  companies  building  them  have  procured  the  right  of  way. 
Private  companies  own  the  .roads ;  they  sell  and  mortgage 
them ;  they  receive  all  the  profits,  and  control  them  in  their 
own  interest.  If  a  tax  can  be  levied  to  aid  in  building  rail 
roads  owned  by  private  parties,  then  taxes  can  be  levied  in 
amount  sufficient  to  build  the  entire  road.  If  the  decision  is 
sound,  its  results  will  prove  most  disastrous. 

The  people  will  be  compelled  to  build  the  roads  for  private 
corporations,  and,  after  they  are  built,  pay  toll  or  fare  for  the 
privilege  of  using  them.  The  people  pay  for  the  roads,  yet 
they  do  not  own  them,  and  have  no  interest  in  them,  or  right  to 
use,  them  except  upon  payment  of  such  sums  as  the  private 
corporations  owning  them  may  choose  to  demand.  We  insist 
that  no  such  power  is  vested  in  the  legislatures  or  in  congress. 
If  the  power  does  exist — if  the  people  can  be  compelled  to 


CONCLUSION. 

build  railroads  for  private  corporations— riii  the  language  of  a 
distinguished  judge  of  the  state  of  New  York,  "It  is  legal 
robbery, less  respectable  than  highway  robbery, in  this:  that  the 
perpetrator  of  the  latter  assumes  the  danger  and  infamy  of  the 
act,  while  this  act  has  the  shield  of  legislative  responsibility." 
The  effect  of  this  decision  is  to  make  railroad  companies  a  com 
ponent  part  of  the  government,  to  draw  more  clearly  the  line 
between  the  people  and  the  combination  of  monopolies  that 
now  control  the  country.  When  the  court  of  last  resort  in 
the  nation  comes  boldly  to  the  front,  and  by  an  edict  (for  it  can 
not  be  treated  as  a  judicial  decision)  declares  that  unless  there 
is  an  "absence  of  all  possible  public  interest,  so  clear  and 
palpable  as  to  be  perceptible  by  every  mind  at  first  blush," 
the  power  to  levy  and  collect  taxes  in  aid  of  railroads  owned 
and  controlled  by  private  corporations  exists,  the  people  have 
reason  to  fear  that  the  interests  of  railroads  and  not  the  con 
stitution  of  the  country  is  the  paramount  law.  But  says  the 
court,  "  That  railways,  though  constructed  by  private  corpo 
rations  and  owned  by  them,  are  public  highways,  has  been 
the  doctrine  of  nearly  all  the  courts  ever  since  such  conveni 
ences  for  passage  and  transportation  have  had  an  existence. 
Very  early  the  question  arose  whether  a  state's  right  of  emi 
nent  domain  coukl  be  exercised  by  a  private  corporation 
created  for  the  purpose  of  constructing  a  railway.  Clearly  it 
could  not,  unless  taking  land  for  such  a  purpose  was  taking 
land  for  public  use.  The  right  of  eminent  domain  nowhere 
justifies  the  taking  of  property  for  private  use.  Yet,  it  is  a 
doctrine  universally  accepted  that  a  state  legislature  may 
authorize  a  private  corporation  to  take  land  for  the  construc 
tion  of  such  road,  making  compensation  to  the  owner.  What 
else  does  the  doctrine  mean  if  not  that  building  a  railway, 
though  it  be  built  by  a  private  corporation,  is  an  act  done  for 
a  public  use.  And  the  reason  why  the  use  has  always  been 
held  a  public  one  is  that  such  a  road  is  a  public  highway, 
whether  made  by  the  government  itself  or  by  the  agency  of 
corporate  bodies,  or  even  by  individuals,  when  they  obtain 
their  power  to  construct  it  from  legislative  grant."  If  the 
court  had  been  employed  as  the  attorneys  of  the  parties  seek 
ing  to  collect  the  tax,  no  more  ingenious  or  partisan  argument 


;270  MONOPOLIES  AND  THE  PEOPLE. 

could  have  been  made  for  the  claimants  than  is  presented  in 
this  opinion.  As  a  finishing  argument  in  favor  of  the  taxing 
power,  the  court  says :  "  Whether  the  use  of  a  railway  is  a 
public  or  a  private  one  depends  in  no  measure  upon  the  ques 
tion  who  constructed  it  or  who  owns  it."  The  court  decides 
that  railroads  are  used  for  public  purposes ;  that  the  right  of 
eminent  domain  attaches  to  them  ;  that,  being  used  for  public 
purposes,  and  having  the  right  of  eminent  domain,  they  are 
public  highways ;  and,  being  public  highways,  taxes  may  be 
levied  upon  the  people  to  aid  private  parties  in  constructing 
them."  We  have  quoted  enough  of  this  decision  to  give  the 
reader  an  idea  of  the  train  of  reasoning  resorted  to  by  the 
court  to  support  the  theory  that  railroads  owned  and  con 
trolled  absolutely  by  private  parties  are  public  highways,  and 
that  the  people  may  be  taxed  to  build  and  maintain  them.  If 
the  supreme  court  of  the  United  States  possessed  the  power 
under  the  constitution  to  pass  upon  the  constitutionality  of 
the  law  of  the  state  of  Wisconsin,  we  would  be  compelled  to 
accept  this  decision  as  the  law  of  the  case ;  to  acknowledge 
that  as  a  question  of  law  private  railroads  were  public  high 
ways  ;  yet,  as  a  matter  of  fact,  we  would  still  have  to  insist 
that  they  remained  private  roads,  over  which  the  public  could 
ride  or  ship  freight  upon  making  compensation  to  the  owners, 
just  as  they  could  ride  or  ship  freight  upon  a  steamboat  or 
common  road  wagon  upon  paying  the  required  amount  to  the 
owner  or  master.  While  legislatures  grant  to  railroad  com 
panies  the  right  to  appropriate  the  lands  of  others  in  procur 
ing  the  right  of  way,  upon  making  compensation  therefor,  no 
part  of  the  price  for  this  right  of  way  is  paid  by  the  govern 
ment  or  the  public.  It  is  paid  by  the  companies  building  the 
roads.  We  are  not  prepared  to  admit  that  the  grant  of  this 
privilege  to  railroad  companies  makes  them  a  part  of  the  gov 
ernment,  or  that  it  clothes  them  with  any  of  the  attributes  of 
sovereignty.  Taxes  can  only  be  levied  for  public  purposes, 
for  the  support  of  the  government,  and  for  the  benefit  of  the 
public.  The  compulsory  payment  of  taxes  to  private  corpora 
tions  cannot  be  supported  upon  any  other  basis  than  of  our 
government  being  a  despotism  and  not  a  constitutional  repub 
lic.  We  have  before  referred  to  the  action  and  decisions  of 


CONCLUSION.  271 

the  supreme  court  on  questions  arising  between  the  people 
and  corporations,  and  only  refer  to  it  here  for  the  purpose  of 
showing  the  necessity  of  reform.  The  action  of  the  courts 
shows  that,  whatever  may  have  heen  their  intention,  they  have 
departed  from  old  constructions  of  the  constitution;  that  judi 
cial  legislation  has  superseded  constitutional  restrictions  and 
limitations,  and  that  the  personal  views  of  the  judges  consti 
tuting  a  majority  of  the  court  have  become  the  supreme  law 
of  the  land. 

Another  noticeable  fact  is  that  the  recently  appointed  judges 
are  the  most  prominent  in  this  new  departure.  We  make  the 
assertion  that  the  supreme  court  of  the  United  States  does  not 
possess  the  power  under  the  constitution  to  overrule  or  disre 
gard  the  decision  of  a  state  court  upon  questions  arising  under 
state  laws  and  constitutions.  No  paragraph,  line,  or  syllable,  of 
the  constitution  of  the  United  States  confers  this  power  upon 
the  supreme  court,  save  when  the  state  law  or  constitution 
contravenes  some  provision  of  the  constitution  of  the  United 
States,  or  some  statute  passed  in  aid  of  constitutional  pro 
visions.  If  the  reader  will  examine  the  decisions  from  which 
we  have  been  quoting,  he  will  find  that  the  rights  of  the  states 
and  of  the  people,  expressly  guaranteed  by  the  constitution, 
have  been,  by  a  bold  and  unwarranted  assumption  by  the 
United  States  supreme  court,  obliterated.  The  decision  of  the 
supreme  court  of  a  state,  whose  decision  was  final  and  binding 
upon  the  supreme  court  of  the  United  States,  has  been  over 
ruled  and  declared  null  and  void,  not  by  virtue  of  any  consti 
tutional  right  vested  in  the  United  States  court,  but  by  an 
assumption  of  power  making  the  will  of  that  court  the  su 
preme  law,  and  placing  corporations  beyond  the  control  of  the 
states  granting  them  their  charters.  The  fact  that  the  reason 
upon  which  the  decision  is  based  appears  in  the  nature  of  an 
apology  for  the  decision,  while  constitutional  rights  are  lost 
sight  of,  proves  the  truth  of  our  assertion,  that  judges  of  courts 
are  subject  to  influences  that  control  other  men,  and  that  the 
interest  of  monopolies  and  not  the  constitutional  rights  of  the 
people  has  a  controlling  influence  in  the  highest  court  in  the 
nation.  It  also  demonstrates  the  fact  that  no  thorough  reform 
can  be  effected  until  the  constitution  of  our  common  country 
shall  control  the  decisions  of  the  courts. 


272  MONOPOLIES   AND    THE    PEOPLE. 

In  proof  of  the  facts  that  the  decisions  of  the  supreme  court 
of  the  United  States  are  not  always  controlled  by  the  constitu 
tion,  let  us  again  refer  to  the  legal  tender  decisions.  Here 
again,  the  opinion  of  a  bare  majority  of  the  court  (five  of  the 
judges  concurring  and  four  dissenting)  establishes  the  Jaw  for 
forty  millions  of  people,  and  does  violence  to  both  the  letter 
and  spirit  of  the  constitution.  Under  the  constitution  the  power 
to  coin  money  and  regulate  its  value  is  vested  in  congress. 
The  states  are  prohibited  from  coining  money,  and  from  mak 
ing  anything  but  gold  and  silver  coin  a  tender  in  payment  of 
debts.  The  letter  of  the  constitution  does  not  deny  to  con 
gress  the  power  to  issue  paper  money  and  make  it  a  legal  ten 
der  ;  but  when  we  take  into  consideration  that  the  power  is 
denied  to  the  states,  the  conclusion  is  irresistible  that  the  power 
was  intended  to  be  denied  to  the  general,  as  well  as  to  the 
state  governments.  While  as  a  war  measure  the  power  might 
be  exercised,  it  certainly  could  not  be  in  time  of  peace.  Be 
ing  one  of  the  extraordinary  powers  vested  in  congress  in  time 
of  war,  rising  above  the  constitutional  restriction,  if  we  may 
use  the  expression,  governed  by  the  law  of  necessity,  the  power 
should  not  be  enlarged  by  judicial  interpretation,  nor  should 
the  plain  letter  of  the  acts  of  congress  passed  as  war  measures 
be  made  to  extend  beyond  it  express  provisions.  When  the 
highest  court  in  the  nation  decided  that  the  legal  tender  act 
was  ultro-active  in  its  operations,  that  court  decided,  in  effect, 
that  under  the  constitution  congress  possessed  the  power  to 
annul  contracts  made  between  private  citizens,  that  one  might 
legally  take  from  another  a  part  of  his  property  without  com 
pensation.  While  that  court  has  uniformly  decided  that  bonds 
obtained  from  counties,  cities,  and  towns  fraudulently,  and 
without  consideration,  must  be  paid,  it  decides  that  a  retroac 
tive  statute  may  be  passed  which  takes  a  man's  property  with 
out  consideration ;  and  that  congress,  without  any  such  power 
being  conferred  by  the  constitution,  can  substitute  a  new  stand 
ard  of  values.  Not  only  that  congress  can  do  this,  but  that 
the  legal  tender  act  extended  beyond  its  plain  reading,  and 
made  paper  money,  a  thing  that  is  of  nc  intrinsic  value,. a 
legal  tender  for  debts  generally ;  that  this  paper  was  the  stand 
ard  of  values,  and  that  coin,  gold  and  silver,  were  but  articles 


CONCLUSION.  273 

1 

of  commerce,  the  value  of  which  was  fixed  by  this  new  paper 
standard.  If  one  not  learned  in  the  law  had  been  called  up 
on  to  interpret  the  constitution  he  would  have  arrived  at  a 
different  conclusion.  If  ten  years  ago  one  learned  in  the  law 
had  been  called  upon  to  interpret  the  meaning  of  the  consti 
tutional  provision  above  referred  to,  he  would,  without  hesita 
tion,  have  decided  that  such  an  act  was  unconstitutional.  If 
the  eminent  jurists  who  graced  the  supreme  bench  at  any  time 
since  the  organization  of  our  government  had  been  required 
to  decide  as  to  the  validity  of  the  statute,  or  to  construe  its 
terms,  or  declare  its  meaning,  a  realizing  sense  of  the  obliga 
tion  resting  upon  them,  and  of  the  danger  of  violating  the 
provisions  of  the  constitution,  would  have  deterred  them  from 
making  such  a  decision.  When,  in  the  winter  of  1869,  the  ques 
tion  was  before  the  court,  upon  careful  examination  Chief  Jus 
tice  Chase,  who  was  the  author  of  the  statute  under  which 
the  question  arose,  and  four  other  judges,  decided  that  it  only 
applied  to  contracts  made  after  its  passage,  and  then  only  as  a 
war  measure.  The  supreme  court  of  the  United  States  de 
clared  that  the  legal  tender  act  had  no  retro-active  operation, 
and  that,  under  the  constitution,  it  could  not  be  extended  be 
yond  its  terms.  That  to  extend  it  further  would  be  a  violation 
of  the  fundamental  law.  Here  the  matter  shou  d  have  ended. 
The  decision  was  and  should  have  remained  final.  But  it  did 
not  meet  the  approval  of  corporation  rings  and  Wall  street 
gamblers.  They  demanded  a  different  decision,  and  their  de 
mand  was  gratified.  To  obtain  a  reversal  without  a  recon 
struction  of  the  court  was  not  expected.  It  was  suddenly  dis 
covered  that  there  was  a  necessity  for  an  additional  judge. 
The  reason  given  was  that  an  even  number  of  judges  might 
divide  and  no  decision  could  be  rendered.  Hence  the  neces 
sity  for  one  more.  It  was  known  to  them  that  one  judge  was 
about  to  resign,  and  that  one  had  concurred  in  the  decision 
which  they  desired  reversed.  Two  judges  were  to  be  appointed. 
If  both  were  in  favor  of  reversal,  then  five  of  the  nine  would 
favor  a  reversal.  (We  have  refered  to  this  matter  before,  and 
do  it  now  for  a  purpose  that  will  soon  appear.)  Two  railroad 
attorneys,  Strong  and  Bradley,  were  recommended  and  ap 
pointed  before  the  close  of  the  term  of  the  court  at  which  the 
34 


274  MONOPOLIES   AND   THE    PEOPLE. 

I 

legal  tender  decision  had  been  rendered.  Notice  was  at  once 
given  that  the  legal  tender  case  would  again  be  presented  to 
the  court  for  a  decision.  It  was  announced,  both  before  and 
after  the  appointment  of  Messrs.  Strong  and  Bradley,  that 
they  were  committed  to  a  reversal  of  the  legal  tender  decision. 
Soon  after  these  fresh  caught  railroad  attorneys  had  taken  their 
seats  upon  the  supreme  bench,  we  find  them  redeeming  the 
pledges  the  friends  of  a  reversal  claimed  had  been  made,  and 
writing  long  arguments  in  favor  of  a  reversal  of  the  opinion 
of  Chief  Justice  Chase  and  the  four  other  eminent  judges,  in 
which  argument  they  seem  to  disregard  constitutional  restric 
tions,  and  to  apologize  for  the  opinions  they  pronounced,  de 
claring  that  treasury  notes  are  a  legal  tender  for  all  debts,  save 
those  that  are  excepted  in  favor  of  the  government.  Thus  by 
the  appointment  of  two  judges,  understood  to  be  pledged  to 
the  railroad  interests,  the  supreme  law  of  the  'United  States 
makes  paper  "  promises  to  pay  "  a  legal  tender  when  contracts 
call  for  money ;  fixes  this  kind  of  paper  as  the  standard  of 
values,  and  makes  gold  and  silver  coin  articles  of  commerce, 
and  at  the  same  time  the  constitution  makes  coin  a  legal  ten 
der  and  the  standard  of  values,  and  prohibits  the  states  from 
making  anything  but  coin  a  legal  tender.  Te  serve  a  particu 
lar  interest  and  benefit  railroad  corporations,  the  personal  views 
of  these  two  judges,  approved  by  three  others,  became  the  su 
preme  law  of  the  land,  in  disregard  of  the  plain  letter  of  the 
constitution,  as  well  as  the  decisions  of  the  same  court  upon 
the  same  statutes  made  but  a  few  months  before. 

We  have  been  thus  particular  in  referring  to  this  decision 
and  the  means  used  to  procure  it,  for  the  purpose  of  showing 
that  the  idea  of  exacting  pledges  of  men  who  are  candidates 
for  judicial  position  is  not  new,  and  that  those  who  apparently 
look  with  alarm  at  what  they  are  pleased  to  term  an  innova 
tion  upon  long  established  precedents,  as  well  as  an  attempt  to 
destroy  the  independence  of  the  courts  of  the  country,  have 
themselves  been  successfully  practicing  the  same  thing,  and 
securing  the  election  and  appointment  of  judges  whose  views 
accorded  with  their  own. 

FOURTH. — Judicial  and  Partisan  Legislation  Reviewed,  and  a 
Remedy  Suggested. —  The  consequence  of  special  legislation  in  fa- 


CONCLUSION.  275 

vor  of  railroad  corporations,  the  granting  of  subsidies  of  land  and 
bonds,  is  not  what  is  claimed  by  the  advocates  of  such  legisla 
tion.  It  has  placed  the  whole  producing  interests  of  the  coun 
try  at  the  mercy  of  soulless  corporations.  It  has  given  rail 
road  corporations  title  to,  and  absolute  control  of,  enough  of 
the  public  land  to  make  an  empire  of  vast  extent.  Lands  that 
of  right  belong  to  the  people,  are  owned  by  these  corporations, 
and  instead  of  the  nominal  price  fixed  by  the  government  up 
on  them,  our  pioneers,  who  settle  and  develop  the  country, 
must  pay  whatever  sum  is  demanded  by  these  corporations,  or 
content  themselves  with  such  lands  as  they  can  find  in  less 
desirable  localities. 

It  has  given  to  railroad  corporations  the  absolute  control  of 
the  coal  lands  of  the  country,  so  that  in  the  future,  as  well  as 
at  the  present  time,  at  all  points  where  there  is  a  scarcity  of 
timber,  the  people  are  compelled  to  pay  such  prices  as  are,  and 
in  the  future  will  be,  demanded  of  them  or  perish  with  cold. 

It  has  established  an  unequal  and  unjust  system  of  taxation, 
by  means  of  which  corporations  are  relieved  from  the  pay 
ment  of  their  just  proportion  of  the  public  taxes.  It  sanctions 
and  supports  bare  frauds  upon  the  public,  in  permitting  cor 
porations  to  add  to  their  capital  stock  at  pleasure,  making  the 
apparent  cost  of  these  roads  much  greater  than  they  really  are, 
and  permitting  them  to  extort  from  the  people  for  transporta 
tion  of  freights  sufficient  amounts  to  pay  the  interest  and  div 
idends  on  this  "  watered  stock."  It  has  taken  from  the  peo 
ple  the  rights  guaranteed  to  them  by  the  constitution,  and 
transferred  their  rights  to  railroad  companies.  These  are  a 
part  of  the  evil  consequences  of  partial  and  special  legislation 
in  favor  of  corporations ;  and  they  could  be  speedily  remedied, 
but  for  the  decisions  of  the  courts. 

These  decisions  we  have  noticed,  and  have  shown  that 
whatever  may  have  been  the  intention  of  the  courts  rendering 
them,  their  tendency  has  been  to  strengthen  and  uphold  the 
mighty  power  asserted  by  corporations.  Where  conflicts  have 
arisen  between  counties  and  municipalities  on  the  one  side, 
and  these  corporations  on  the  other,  the  courts  have  treated 
these  railroad  companies  as  private  corporations,  and  have  de 
cided  in  their  favor.  When  the  majority  of  a  legislature,  be- 


276  MONOPOLIES   AND  THE   PEOPLE. 

lieving  that  corporations  were  subject  to  legislative  control, 
have  attempted  to  restrict  their  powers,  and  correct  their 
abuses,  the  courts  have  said  their  charters  were  in  the  nature 
of  contracts,  which  the  legislature  could  not  alter  or  amend, 
and  the  people  have  been  compelled  to  submit.  When  the 
question  of  the  right  to  levy  taxes  for  the  purpose  of  building 
railroads  is  to  be  decided,  another  phase  of  the  question  is 
presented.  All  the  courts  agree  that  taxes  cannot  be  levied 
for  a  private  purpose.  The  difficulty  is  met  and  overcome  in 
this  way  : 

First. — It  is  announced  that  railroad  corporations  have  the 
right  of  eminent  domain,  that  this  right  is  an  attribute  of 
sovereignty ;  and  for  this  reason  they  must  be  considered  pub 
lic  corporations.  We  have  referred  to  this  already,  but  refer 
to  it  again  for  the  purpose  of  showing  that  the  argument  is 
not  sound.  The  right  of  eminent  domain  is  possessed  by  the 
supreme  power  of  the  nation.  It  belongs  to  all  governments. 
Of  right  it  is  not  inherent  in,  nor  can  it  be  acquired  by,  any 
private  person  or  corporation.  If  the  right  is  ever  exercised 
by  any  corporation,  company,  or  individual,  it  must  be  by  the 
permission  of  the  governing  power  ;  in  this  country  by  legis 
lative  grant.  If  it  belonged  to  corporations  they  could  exer 
cise  it  without  the  consent  of  the  legislature.  They  could 
themselves  decide  how,  when,  and  where  they  would  exercise 
it.  They  could  prescribe  the  mode  of  condemning  the  prop 
erty  of  others  to  their  own  use,  and  no  power  in  government 
could  question  their  acts.  It  will  not  be  contended  that  with 
out  special  legislative  enactment,  railroad  companies  could  ap 
propriate  the  property  of  others  for  the  purpose  of  building 
their  roads  upon  it.  All  will  agree  that  before  they  can  do 
this,  the  legislature  must  confer  the  right  upon  them.  Does 
the  act  of  granting  to  corporations  the  right  to  build  their 
roads  through  the  property  of  others  confer  upon  them  any 
of  the  attributes  of  sovereignty  ?  If  so,  the  legislature  pos 
sesses  the  power  of  granting  its  attributes  to  corporations  or  to 
any  private  person.  It  would  be  immaterial  whether  a  single 
person,  a  company,  or  a  corporation,  desired  to  build  a  railroad. 
To  make  such  person,  company,  or  corporation  a  part  of  the 
government,  the  legislature  need  but  delegate  to  the  party  de- 


CONCLUSION.  277 

siring  to  build  a  railroad  the  right  of  eminent  domain ;  and 
from  that  moment  the  individual  or  corporation  becomes  a  part 
of  the  government.     A  moment's  reflection  will  convince  the 
reader  that  the  position  is  untenable.     If  one  of  the  attributes 
of  sovereignty  can  be  farmed  out  to  railroad  corporations,  an 
other  can  be  to  some  other  interest,  and  in  process  of  time  the 
government  itself  would  become  a  mere  skeleton,  having  dele 
gated  all  its  powers  to  private  parties,  remaining  only  a  govern 
ment  in  name.     From  time  immemorial,  the  legislature  has 
granted  to  various  parties  the  same  kind  of  privileges  that  are 
granted  to  railroad  companies ;  yet  it  never  was,  and  is  not 
now  claimed,  that  because  of  such  grants,  the  parties  obtaining 
them  became  public  corporations,  or  that  they  were  clothed 
with  any  of  the  attributes  of  sovereignty.      Ferry  companies, 
plank-road  companies,  and  turnpike   road   companies,   have 
been  chartered  with  power  to  take  the  property  of  others,  and 
place  their  ferries,  buildings,  and  roads  upon  the  property  so 
taken,  upon  payment  of  the  appraised  value.     In  many  of  the 
states  laws  have  been  enacted  under  which   private   parties 
have  been  granted  the  same  privilege.     Persons  building  mills 
are  permitted  to  construct  dams  across  streams  and  appropri 
ate  such  portions  of  the  overflowed  lands  of  adjoining  owners 
to  their  own  use,  upon  payment  of  its  value  as  found  by  ap 
praisers.     A  and  B,  and  their  associates,  desire  to  build  a 
mill ;  in  the  construction  of  their  dam  they  cause  the  back 
water  to  flood  the  land  of  C.     Under  the  provisions  of  the 
statute  a  jury  is  called,  who  assess  the  value  of  the  land  of  0  so 
overflowed  and  appropriated  by  A  and  B.     The  mill  is  built 
for  the  accommodation  of  the  public.     All  who  desire  to  do  so 
can  take  their  grain  to  this  mill  and  have  it  ground  upon  pay 
ment  of  the  required  toll.     The  owners  have,  under  the  statute, 
the  same  right  of  eminent  domain  that  is  conferred  upon  rail 
road  companies;  and  their  mill  is  used  expressly  for  grinding  for 
all  who  patronize  it  and  pay  the  required  toll.     The  owners  of 
the  railroad,  and  the  owners  of  the  mill  alike,  serve  the  public. 
Both  do  it  for  a  pecuniary  consideration.     Both  have  the  same 
right  of  appropriating  the  property  of  others.     Yet  the  rail 
road,  under  the  decisions  of  the  courts,  is  a  public  corporation, 
while  the  mill  is  a  private  one.     The  railroad  corporation  is 


278  MONOPOLIES  AND   THE   PEOPLE. 

clothed  with  one  of  the  attributes  of  sovereignty,  while  the 
owners  of  the  mill  retain  their  character  as  a  private  corpora 
tion.  ~No  good  reason  appears  for  this  distinction.  While  we 
admit  that  the  supreme  court  of  the  United  States  has  decided 
that  because  of  the  fact  of  legislatures  having  granted  to  rail 
road  companies  the  right  to  appropriate  the  lands  of  other  per 
sons  to  be  used  as  road-beds,  they  become  public  corporations, 
and  that  until  reversed  we  must  accept  it  as  the  law,  we  con 
tend  that  as  long  as  the  railroads  are  owned  and  controlled  by 
private  parties,  and  their  earnings  are  appropriated  and  used 
exclusively  for  private  purposes,  the  facts  are  in  direct  conflict 
with  the  law  as  declared  by  the  supreme  court,  and  that  either 
the  facts  or  the  law  must  be  changed  before  they  harmonize. 

Second. — It  has  also  been  decided  by  the  courts  that  rail 
roads  are  public  highways  (an  absurdity  on  its  face,  that 
under  the  law  railroads  are  public  highways,  while  they  are 
owned  and  controlled  by  private  companies,  who  become 
public  corporations  because  of  one  of  the  attributes  of  sover 
eignty  having  been  conferred  upon  them),  and  that,  because 
they  are  public  highways,  taxes  can  be  levied  upon  the  people 
for  building  and  repairing  them.  The  fact  being  admitted 
that  private  parties  own  and  control  railroads ;  that  the  gov 
ernment  receives  no  part  of  their  earnings,  and  that  neither 
the  government  nor  private  persons  can  ride  upon  them  with 
out  paying  for  the  privilege,  or  procuring  a  pass,  and  that  no 
freights  can  be  shipped  over  them  without  payment  of  the 
amounts  demanded,  seems  to  conflict  with  the  decisions  of  the 
courts.  Under  the  decisions  of  the  supreme  court,  the  prop 
erty  of  the  citizen  is  taken  from  him  without  compensation, 
and  bestowed  upon  a  private  corporation,  and  the  plain  pro 
vision  of  the  constitution  has  received  a  new  interpretation, 
which  compels  the  property  owners  to  bestow  a  part  of  it  on 
corporations  without  any  consideration  whatever.  The  situa 
tion  is  about  as  follows :  When  a  conflict  arises  between  the 
people  and  railroad  corporations,  or  when  the  legislature 
attempts  to  reform  abuses  practiced  by  them,  the  courts  hold 
that  railroad  charters  are  in  the  nature  of  contracts,  and  that 
the  legislature  can  neither  alter,  amend,  or  repeal  them.  The 


CONCLUSION.  279 

companies  are  then  treated  as  private  corporations.     In  proof 
of  this  look  at  the  following  decision,  of  recent  date  : — 

"SUPREME  COURT  OF  THE  UNITED  STATES. 

"  The  Wilmington  $  Weldon  Railroad  Company,  Plaintiff  in  error, 
vs.  John  A.  Reid,  Sheriff",  etc. — In  error  to  the  Supreme  Court 
of  the  State  of  North  Carolina. 

"  Mr.  Justice  Davis  delivered  the  opinion  of  the  court : — 
"  This  is  a  writ  of  error  to  the  supreme  court  of  the  state  of 
North  Carolina,  and  brings  up  the  question  whether  the  recent 
legislation  of  the  state,  concerning  the  collection  of  taxes,  is,  as 
it  affects  the  plaintiff  in  error,  in  violation  of  that  provision  of 
the  constitution  of  the  United  States  which  declares  that  no 
state  shall  pass  any  law  impairing  the  obligation  of  contracts. 
As  early  as  1833,  the  general  assembly  «of  North  Carolina  in 
corporated  the  Wilmington  &  Weldon  railroad  company,  for 
the  purpose  of  constructing  a  railroad  in  the  state,  and  in 
serted  a  provision  in  the  charter  *  that  the  property  of  said 
company,  and  the  shares  therein,  shall  be  exempted  from  any 
public  charge  or  tax  whatsoever.'  It  has  been  so  often  decided 
by  this  court  that  a  charter  of  incorporation  granted  by  a  state 
creates  a  contract  between  the  state  and  the  corporators,  which 
the  state  cannot  violate,  that  it  would  be  a  work  of  supereroga 
tion  to  repeat  the  reasons  on  which  the  argument  is  founded. 
It  is  true  that  when  a  corporation  claims  an  exemption  from 
taxation,  it  must  show  that  the  power  to  tax  has  been  clearly 
relinquished  by  the  state,  and  if  there  be  a  reasonable  doubt 
about  this  having  been  done,  that  doubt  must  be  solved  in 
favor  of  the  state.  (The  Binghampton  Bridge  Case,  3  Wal 
lace.)  If,  however,  the  contract  is  plain  and  unambiguous, 
and  the  meaning  of  the  parties  to  it  can  be  clearly  ascertained, 
it  is  the  duty  of  the  court  to  give  effect  to  it,  the  same  as  if  it 
were  a  contract  between  private  persons,  without  regard  to  its 
supposed  injurious  effects  upon  the  public  interests. 

"  It  may  be  conceded  that  it  were  better  for  the  interests  of 
the  state  that  the  tax-paying  power,  which  is  one  of  the  high 
est  and  most  important  attributes  of  sovereignty,  should  .on  no 
occasion  be  surrendered.  In  the  nature  of  things,  the  neces- 


280  MONOPOLIES   AND   THE    PEOPLE. 

sities  of  the  government  cannot  always  be  foreseen,  and  in  the 
changes  of  time  the  ability  to  raise  revenue  from  every  species 
of  property  may  be  of  vital  importance  to  the-  state,  but  the 
courts  of  the  country  are  not  the  proper  tribunals  to  apply  the 
corrective  to  improvident  legislation  of  this  character.  If 
there  be  no  constitutional  restraint  on  the  action  of  the  legis 
lature  on  this  subject,  there  is  no  remedy,  except  through  the 
influence  of  a  wise  public  sentiment,  reaching  and  controlling 
the  conduct  of  the  law-making  power. 

"  There  is  no  difficulty  whatever  in  this  case.  The  general 
assembly  of  North  Carolina  told  the  Wilmington  &  Weldon 
railroad  company,  in  language  which  no  one  can  misunder 
stand,  that  if  they  would  complete  the  work  of  internal  im 
provement  for  which  they  were  incorporated,  their  property 
and  the  shares  of  their^  stockholders  should  be  forever  exempt 
from  taxation.  This  is  not  denied,  but  it  is  contended  that 
the  subsequent  legislation  does  not  impair  the  obligation  of 
the  contract,  and  this  presents  the  only  question  in  the  case. 
The  taxes  imposed  are  upon  the  franchise  and  rolling  stock 
of  the  company,  and  upon  lots  of  land  appurtenant  to  and 
forming  part  of  the  property  of  the  company,  and  necessary 
to  be  used  in  the  successful  operation  of  its  business.  It  cer 
tainly  requires  no  argument  to  show  that  a  railroad  corpora 
tion  cannot  perform  the  functions  for  which  it  was  created 
without  owning  rolling  stock,  and  a  limited  quantity  of  real 
estate,  and  that  these  are  embraced  in  the  general  term  prop 
erty.  Property  is  a  word  of  large  import,  and,  in  its  applica 
tion  to  this  company,  included  all  the  real  and  personal  estate 
required  by  it  for  the  successful  prosecution  of  its  business. 
If  it  had  appeared  that  the  company  had  acquired  either  real 
or  personal  estate  beyond  its  legitimate  wants,  it  is  very  clear 
that  such  acquisitions  would  not  be  within  the  protection  of 
the  contract.  But  no  such  case  has  arisen,  and  we  are  only 
called  upon  to  decide  upon  the  case  made  by  the  record, 
which  shows  plainly  enough  that  the  company  has  not  under 
taken  to  abuse  the  favor  of  the  legislature. 

"  It  is  insisted,  however,  that  the  tax  on  the  franchise  is 
something  entirely  distinct  from  the  property  of  the  corpora 
tion,  and  that  the  legislature,  therefore,  was  not  inhibited  from 


CONCLUSION.  281 

taxing  it.  This  position  is  equally  unsound  with  the  others 
taken  in  this  case.  Nothing  is  better  settled  than  that  the 
franchise  of  a  private  corporation — which,  in  its  application  to 
a  railroad,  is  the  privilege  of  running  it  and  taking  fare  and 
freight — is  property,  and  of  the  most  valuable  kind,  as  it  can 
not  be  taken  for  public  use  even,  without  compensation.  (Red- 
field  on  Railways,  p.  129,  sec.  70.)  It  is  true  it  is  not  the  same 
sort  of  property  as  the  rolling  stock,  road-bed,  and  depot 
grounds,  but  it  is  equally  with  them  covered  by  the  general 
term,  'the  property  of  the  company,'  and,  therefore,  equally 
within  the  protection  of  the  charter. 

"  It  is  needless  to  argue  the  question  further.  It  is  clear 
that  the  legislation  in  controversy  did  impair  the  obligation  of 
the  contract  which  the  general  assembly  of  North  Carolina 
made  with  the  plaii:tiff  in  error,  and  it  follows  that  the  judg 
ment  of  the  supreme  court  must  be  reversed.  It  is  so  ordered, 
and  the  cause  is  remanded  for  further  proceedings,  in  con 
formity  with  this  opinion. 

"D.  W.  MIDDLETON, 
"  C.  S.  C.  IT.  S." 

When  the  question  of  the  right  to  levy  taxes  upon  the  peo 
ple,  for  the  purpose  of  building  railroads,  is  before  the  courts, 
they  decide  that  such  right  exists :  First,  because  the  right  of 
eminent  domain  has  been  conferred  upon  the  company ;  and, 
second,  because  the  railroads  are  public  highways ;  so,  that,  in 
every  phase  the  question  assumes,  the  decisions  of  the  courts 
are  in  favor  of  these  corporations,  and  adverse  to  the  people. 

Notwithstanding  the  fact  that  the  decisions  of  the  courts  fix 
the  status  of  the  railroad  corporations  as  public  in  their  nature, 
the  real  fact  remains  that  railroads  are  owned  and  controlled 
by  private  parties,  and  it  is  a  mere  fiction  of  law  to  call  them 
public ;  and  while  we  accept  the  decisions  as  law,  the  facts  are 
unchanged.  The  effect  of  the  legislation  to  which  we  have 
referred  is  apparent  to  all.  It  has  strengthened  corporations, 
enlarged  their  powers,  and  constantly  encroaches  upon  the  rights 
of  the  people.  So  great  has  this  evil  become  that  almost  the 
entire  population  of  the  country,  not  under  the  control  of  or 
interested  in  railroad  corporations,  are  demanding  a  change  of 
35 


282  MONOPOLIES   AND   THE    PEOPLE. 

legislation,  and  relief  from  the  oppressions  heaped  upon  them 
by  these  monopolies. 

But  the  injuries  inflicted  upon  the  people  by  the  decisions  of 
the  courts  are  far  greater  than  those  resulting  from  legislation. 
By  the  decisions  of  the  supreme  court  of  the  United  States, 
the  distinction  between  public  and  private  rights  has  been  ob 
literated  ;  the  constitution  of  the  country  has  become  of  no 
more  binding  force  than  statute  laws.  State  statutes  and  the 
decisions  of  state  courts  have  been  overridden  and  annulled 
where  the  interests  of  corporations  were  to  be  subserved ;  the 
settled  decisions  of  the  same  court  have  been  overruled,  and 
a  new  doctrine,  in  conflict  with  the  settled  interpretation  of 
the  fundamental  law  of  the  land,  has  been  announced,  which 
makes  the  people  the  vassals  of  railroad  corporations.  The 
rights  of  the  people  and  the  states  have  been  disregarded,  and 
the  edicts  of  the  supreme  court  have  been  substituted  for  con 
stitutional  law.  By  the  decree  of  that  court,  railroad  corpor 
ations  are  clothed  with  the  attributes  of  sovereignty,  and  the 
people  are  compelled  to  pay  taxes  to  aid  in  the  construction  of 
their  roads.  That  court  has  engaged  in  judicial  legislation, 
and  fastened  upon  the  people  a  despotic  government,  with  rail 
road  corporations  as  their  rulers.  If  it  be  true  that  railroad 
corporations  are  public  and  not  private,  they  are  not  subject 
to  the  control  of  state  courts  or  state  legislatures.  They  are 
not  by  their  charters,  or  the  powers  derived  from  legislative 
grants,  made  public  corporations,  and  if  they  are  public,  they 
are  made  so  by  the  decisions  of  the  supreme  court,  or  by  some 
assumed  power  not  visible  to  the  public  eye.  It  is  contended 
by  some,  that  if  it  is  fully  established  that  they  are  public  cor 
porations,  the  state  legislatures  and  the  state  courts  can  regu 
late  and  control  them.  Is  this  so  ?  Will  not  that  fact  take 
from  the  states  all  jurisdiction  over  them?  The  decision 
making  railroad  corporations  public,  also  makes  their  roads 
public  highways  extending  throughout  the  country.  It  is 
claimed  that  the  general  government,  having  power  to  regu 
late  commerce  between  the  states,  can  take  control  of  all  the 
railroads  in  the  United  States.  No  power  is  conferred  upon 
state  legislatures,  in  many  of  the  states,  to  grant  charters  to  rail 
road  companies,  conferring  upon  them  any  sovereign  powers. 


CONCLUSION.  283 

And  by  the  constitutions  of  some  of  the  states  they  arc  de 
prived  of  the  power  of  aiding  in  any  works  of  internal  improve 
ment.  As  a  consequence,  there  could  not  be  uniform  legisla 
tion  among  the  states  in  relation  to  railroads.  Being  public 
highways,  and  the  corporations  being  also  public,  the  power 
of  regulating  and  controlling  them,  and  preventing  discrimina 
tion  among  the  states,  would  belong  to  the  genera]  government, 
and  these  powerful  corporations,  chartered  by  the  state  in  which 
'they  are  located,  could  defy  state  authority.  With  a  congress 
composed  of  their  friends,  and  a  supreme  court  already  com 
mitted  to  their  interests,  the  people  would  be  powerless.  But 
on  the  other  hand,  if  (as  we  insist  is  the  fact)  railroad  compa 
nies  are  private  corporations,  then  they  are  within  the  jurisdic 
tion,  and  subject  to  the  control  of,  the  authorities  of  the  states 
in  which  they  are  located.  This  we  insist  is  the  true  status  of 
railroad  corporations,  and  the  courts,  by  their  decisions,  can 
not  change  this  character.  The  decisions  of  the  courts  of  the 
different  states  and  of  the  nation  have  not  been  of  a  character 
to  command  the  respect  of  the  people,  and  unless  we  accept 
the  last  edict  of  the  supreme  court  of  the  nation,  as  the  su 
preme  law  of  the  land,  and  admit  that  it  supersedes  the  con 
stitutions  and  statutes  of  the  states,  as  well  as  the  decisions  of 
the  state  courts,  it  is  difficult  to  determine  the  character  of 
railroad  corporations  and  their  relation  to  the  people.  Accept 
ing  that  decision  as  final,  the  constitution  of  the  United  States 
is  of  but  small  value,  and  state  governments  are  of  but  little 
benefit  to  the  people.  Upon  the  various  questions  that  have 
arisen  in  connection  with  the  construction  of  railroads,  and 
the  rights  of  the  people,  and  railroad  corporations  respectively, 
there  has  been  such  confusion  in  the  decisions  of  the  courts, 
as  well  as  contradiction,  reversals,  and  overrulings,  that  there 
now  exists  a  necessity  for  the  regular  issue  of  a  judicial  bulle 
tin,  like  the  market  reports,  that  the  people  may  know  what 
is  the  latest  interpretation  of  the  constitution.  By  the  supreme 
court  of  the  state  of  Iowa,  it  was  decided  to  be  constitutional 
for  counties  and  cities  to  subscribe  stock  to  railroad  compa 
nies,  and  that  there  was  a  statute  authorizing  such  subscrip 
tions.  By  the  same  court  it  was  decided,  overruling  the  above 
named  decision,  that  the  constitution  did  not  confer  the  power 


284  MONOPOLIES   AND   THE    PEOPLE. 

to  subscribe  stock  to  railroad  companies,  and  that  there  wag 
no  law  of  the  state  authorizing  such  subscription.  The  whole 
matter  arose  under  the  constitution  and  laws  of  the  state. 
The  supreme  court  of  the  United  States  overruled  this  last 
decision  of  the  state  courts,  and  decided  that  such  subscription 
was  constitutional  and  was  authorized  by  the  laws  of  the  state. 
The  courts  of  the  states  of  Pennsylvania,  Illinois,  Indiana,  Wis 
consin,  Missouri,  and  otheVs,  made  like  decisions,  and  the  su 
preme  court  of  the  United  States  overruled  them.  The  legis 
latures  of  some  of  the  states  —  Iowa,  Wisconsin,  and  Michi 
gan  included,  passed  statutes  authorizing  local  aid  in  shape 
of  a  tax  to  be  voted  to  railroad  companies.  The  supreme 
courts  of  these  states  decided  that  the  statutes  were  unconsti 
tutional,  and  within  fifteen  months  thereafter  the  supreme 
court  of  Iowa  decided  that  the  Iowa  act  was  constitutional. 
Like  decisions  were  made  in  some  of  the  other  states.  In 
Wisconsin  the  state  courts  decided  the  act  was  unconstitution 
al,  and  the  supreme  court  of  the  United  States  overruled  that 
decision  and  decided  that  the  act  was  constitutional.  Some  of 
the  state  courts  hold  that  railroad  corporations  are  private, 
whilst  others  decide  that  they  are  public.  The  supreme  court 
of  the  United  States,  by  its  decisions,  clothes  them  with  one  of 
the  attributes  of  sovereignty,  and  declares  that  under  the  law 
they  are  public  corporations,  and  that  their  roads  are  public 
highways.  The  same  court,  upon  the  legal  tender  issues,  de 
cided  that  treasury  notes  were  not  legal  tender  for  debts  con 
tracted  before  the  enactment  of  the  statute  providing  for  their 
issue.  In  a  few  months  after  that  decision  was  made,  and  af 
ter  the  friends  of  railroad  corporations  had  so  reconstructed 
the  court  as  to  have  a  majority  of  the  court  in  favor  of  a  re 
hearing  of  the  question,  the  same  high  court  decided  that  treas 
ury  notes  were  not  only  legal  tender  for  all  debts  (save  those 
exceptecl  by  the  statutes),  but  that  they  were  the  standard  of 
values.  In  all  of  the  above  decisions  made  by  the  supreme 
court  of  the  nation,  either  reversing  the  decisions  of  the  state 
courts,  or  reversing  and  overruling  its  own  decisions,  such 
reversals  and  overrulings  were  in  favor  of  the  corporations 
and  against  the  people.  When  courts,  whose  duty  it  is  to  de. 
clare  the  law  and  interpret  the  constitution,  differ  so  widely 


CONCLUSION.  285 

and  change  so  often,  it  is  not  strange  that  the  people  should 
begin  'to  look  with  suspicion  upon,  and  doubt  the  binding 
force  of,  these  decisions ;  and  when  it  is  received  as  a  truth, 
that  in  the  appointment  of  judges  care  was  taken  to  select 
men  who  were  pledged  to  decide  important  issues  then  pend 
ing,  in  accordance  with  the  interests  and  expressed  wishes  of 
railroad  companies,  it  will  not  appear  strange  that  the  people, 
before  voting  for  a  judge,  should  demand  of  him  a  pledge  in 
favor  of  measures  advocated  by  them,  or  that  he  at  least  should 
pledge  himself  to  abstain  from  judicial  legislation  and  from 
twisting  the  meaning  of  the  constitution  to  suit  the  views  of 
the  monopolists  who  are  already  clothed  with  too  much  power. 
If  it  is  important  that  men  elected  to  congress  and  state  legis 
latures  should  be  in  sympathy  with  the  people  in  their  strug 
gle  to  regain  their  rights,  now  usurped  by  the  different  mo 
nopolies  of  the  country;  and  if  it  is  necessary  that  the  execu 
tive  departments  of  the  state  and  national  government  should 
be  filled  with  men  who  are  friends  of  the  people  and  in  favor 
of  restricting  corporations  within  proper  and  legitimate  bounds, 
—  it  is  of  vastly  more  importance  that  the  seats  of  justice,  the 
courts  of  the  country,  should  be  filled  and  controlled  by  men 
who,  instead  of  deciding  cases  according  to  their  own  personal 
views  of  what  the  constitution  ought  to  be,  will  accept  it  in 
letter  and  spirit  as  it  is,  and  decide  accordingly.  An  inordi 
nate  desire  to  interpret  the  fundimental  law,  to  give  it  a  new 
meaning,  or,  as  it  is  commonly  expressed,  for  amending  the 
constitution  by  judicial  legislation,  seems  to  have  seized  the 
courts,  and  has  been  followed  to  such  length  as  to  make  it  al 
most  impossible  for  even  the  courts  themselves  to  decide  when 
an  act  is  constitutional  and  when  it  is  not.  A  new  decision  is 
made  as  often  as  a  new  judge  is  appointed,  not  unfrequently 
overruling  the  long  settled  decisions  of  the  courts.  These  de 
cisions,  no  matter  how  absurd  or  unjust,  must  be  accepted  by 
the  whole  country  as  the  supreme  law  of  the  land.  Of  late 
years,  by  accident  or  design,  most  of  the  decisions  on  ques 
tions  of  a  general  nature  have  been  adverse  to  the  interests  of 
the  people,  and  in  favor  of  monopolies.  Newly  appointed 
judges,  scarcely  warm  in  their  seats,  have  not  hesited  to  over 
rule  the  decisions  of  "Marshall,"  of  "Story,"  and  "Chase;" 


286  MONOPOLIES    AND   THE    PEOPLE. 

to  disregard  the  views  of  "Webster,"  of  "Adams,''  of  "Jeffer 
son,"  of  "Washington,"  and  "Hamilton,"  on  constitutional 
questions.  Their  own  personal  views  have  been  substituted 
for  constitutional  law,  until  the  protection  that  instrument  is 
supposed  to  afford  the  private  citizen  is  eifffcirely  destroyed, 
and  the  absolute  control  of  the  government  is  transferred  to  the 
few  monopolists,  who,  under  the  sanction  of  the  courts,  op 
press  the  whole  people.  Whatever  reform  may  be  effected 
in  the  legislative  and  executive  departments  of  the  govern 
ment,  no  real  reform  can  obtain  without  a  reformation  of  the 
courts. 

FIFTH. —  The  Effect  of  the  Legal  Tender  Decision,  and  its  Anti 
dote. —  The  power  of  congress  to  issue  treasury  notes  and  gov 
ernment  paper  as  a  war  measure,  is  not  denied.  The  authori 
ty  or  the  right,  under  the  constitution,  to  make  government 
promises  to  pay  (treasury  notes)  legal  tender,  is  not  admitted. 
We  have  already  treated  of  the  legal  tender  decisions  ;  of  the 
reconstruction  of  the  court,  and  the  means  used  to  secure  the 
appointment  of  judges  to  insure  a  majority  in  favor  of  the 
validity  of  the  legal  tender  act,  and  its  general  application  to 
all  debts  save  those  excepted  in  the  act,  no  matter  at  what 
time  they  were  contracted.  We  recur  to  this  subject  again 
for  the  purpose  of  showing  its  effect  upon  the  financial  inter 
ests  of  the  country.  Whatever  may  have  been  the  views  of 
congress  in  passing  the  act,  or  of  the  court  in  declaring  it  con 
stitutional,  it  has  proved  disastrous  to  the  interests  of  the 
people,  and  of  great  benefit  to  the  corporate  oligarchy  that 
now  rules  the  country.  Whatever  may  have  been  the  views ' 
of  the  majority  of  the  court,  or  the  motives  that  prompted  and 
controlled  that  majority  in  rendering  the  legal  tender  decis 
ions,  these  decisions  have  proved  disastrous  to  the  interests  of 
the  people,  and  added  greatly  to  the  already  great  power  of 
corporations  and  Wall  street  speculators.  In  our  commerce 
with  foreign  nations  we  are  obliged  to  use  money  or  its  equiv 
alent.  While  the  acts  of  congress  and  the  decisions  of  courts 
may  make  treasury  notes  legal  tender  for  all  domestic  debts, 
and  all  foreign  debts  payable  in  this  country,  neither  the  acts 
of  congress  nor  the  decisions  of  courts  can  have  any  power  or 


CONCLUSION.  287 

controlling  influence  over  other  nations.  Debts  due  from  us 
payable  in  foreign  countries  must  be  paid  in  coin  or  its  equiv 
alent.  Our  governmental  promises  to  pay  will  not  pass  cur 
rent  as  money  in  foreign  countries,  even  though  accompanied 
and  supported  by  the  decision  of  the  supreme  court,  deciding 
that  they  are  to  be  received  by  us  as  legal  tender  in  all  of  our 
transactions.  No  one  will  claim  that  treasury  notes  are  money, 
or  that  they  are  of  intrinsic  value.  It  is  because  the  govern 
ment  is  pledged  to  redeem  this  class  of  paper  with  coin  that  it 
has  a  market  value.  All  other  nations-  recognize  coin  —  gold 
and  silver  —  as  the  measure  of  values.  It  is  the  standard  for 
all  other  articles  of  barter  or  sale.  It  is  money.  All  other  issues 
are  but  the  representatives  of  money.  Debts  due  from  us, 
payable  in  foreign  countries,  must  be  paid  in  money ;  legal 
tender  will  not  answer.  But  if  debts  due  us  from  persons  re 
siding  in  other  countries  are  to  be  paid  here,  the  debtors  can 
take  their  money,  buy  our  legal  tender  at  a  discount  of  fifteen 
or  twenty  dollars  to  the  hundred,  and  discharge  their  debts, 
saving  for  themselves  the  difference  between  coin  and  paper. 
The  confidence  we  have  in  the  promises  of  the  government  to 
redeem  in  coin  is  all  that  makes  treasury  notes  pass  current, 
or  gives  them  a  market  value. 

The  hope  of  an  early  resumption  of  specie  payment  is  blast 
ed  by  the  legal  tender  decision.  Its  effect  is  to  drain  the 
United  States  of  coin  in  our  commerce  with  foreign  nations, 
thus  making  it  impossible  to  resume.  Our  coin  grows  less 
from  day  to  day,  and  the  secretary  of  the  treasury  is  obliged  to 
sell  gold  in  New  York  at  short  intervals  and  in  large  amounts, 
in  order  to  prevent  the  Wall  street  brokers  making  a  margin 
of  twenty-five  per  cent  or  more  between  coin  and  government 
paper.  While  stock  jobbers  and  gold  brokers  make  large 
profits  in  the  appreciated  price  of  gold ;  and  railroad  compa 
nies,  in  paying  their  bonds,  make  a  net  gain  to  the  amount  of 
the  difference  in  value  between  gold  and  legal  tender  currency, 
the  farmers  and  producers  suffer  loss  to  the  amount  of  this  differ 
ence  in  disposing  of  their  products.  When  wheat  is  sold  for  one 
dollar  per  bushel,  the  seller  gets  but  eighty-four  cents,  or  just 
the  value  of  treasury  notes,  and  not  one  dollar  in  money,  as  he 


288  MONOPOLIES   AND   THE   PEOPLE. 

imagines,  because  the  dollar  he  gets  has  no  intrinsic  value,  but 
sells  at  its  market  worth,  coin  being  the  standard  of  values. 

Another  result  of  the  legal  tender  decision  is  to  make  the 
value  of  farm  products  dependent  upon  the  operations  of  Wall 
street  sharpers.  Legal  tenders  are  the  standard  of  values,  says 
the  court ;  coin  and  all  marketable  articles  have  their  values 
measured  by  treasury  notes.  The  price  of  treasury  notes  fluc 
tuates.  This  fluctuation  is  not  caused  by  any  real  change  in  the 
relative  value  of  coin  and  treasury  notes,  but  results  from  the 
dealings  and  operations  in  Wall  street.  If  the  "  bulls  "  corner 
gold,  its  value  rises,  or,  more  properly  speaking,  treasury  notes 
depreciate  in  value.  When  the  "  bears  "  control  the  market, 
the  price  of  treasury  notes  advances.  This  legal  measure  of 
values  is  constantly  changing,  and  with  its  rise  and  fall  the 
prices  of  western  products  also  rise  or  fall.  Railroads,  railroad 
stocks  and  bonds,  and  the  currency  of  the  country,  as  well  as 
the  coin,  are  all  under  the  control  of  Wall  street  operators,  and 
as  long  as  treasury  notes  are  treated  as  legal  tender,  these 
same  operators  will  control  the  markets  of  the  whole  country. 

The  legal  tender  acts  and  decisions,  in  effect,  provide  an  ir 
redeemable  paper  currency  for  the  people,  and  coin  for  the 
government.  Duties  on  imports  must  be  paid  in  coin.  Wall 
street  brokers  have  the  coin  of  the  country  cornered ;  the  im 
porter  must  buy  it  of  them ;  he  pays  it  to  the  government ; 
government  sells  it  to  the  broker,  and  he  again  sells  it  to  the 
importer.  It  cannot  get  into  general  use,  because  the  brokers 
preserve  so  great  a  margin  between  gold  and  paper  as  to  drive 
all  coin  from  circulation.  They  monopolize  the  gold  market, 
and,  under  the  legal  tender  decision,  control  the  money  mar 
ket  of  the  whole  country.  This  state  of  things  must  continue 
until  the  legal  tender  act  is  repealed  or  the  decisions  of  the  su 
preme  court  are  reversed. 

The  imagination  cannot  devise  a  more  perfect  system  for  the 
subjection  of  the  best  interests  of  the  people  to  the  control  of 
railroad  and  monied  corporations  and  companies,  and  Wall 
street  brokers  and  gamblers.  It  needed  but  the  legal  tender 
decision  to  make  it  perfect;  to  subject  the  whole  country  to 
the  rule  of  rings  and  combinations  of  unscrupulous  and  dis 
honest  men  ;  to  reduce  the  people  to  a  state  of  vassalage  more 


CONCLUSION.  289 

degrading  than  that  of  the  Russian  serfs.  In  name  we  are  a 
free  people,  protected  by  the  constitution  of  our  country ;  in 
fact,  we  are  the  servants  of  these  giant  monopolies.  We  re 
tain  of  the  proceeds  of  our  labor  such  portion  as  they  gracious 
ly  permit  us  to  keep.  With  the  congress  of  the  United  States, 
and  the  legislatures  of  most  of  the  states,  committed  to  their 
interests,  and  the  supreme  court  of  the  nation  issuing  its  edicts 
in  their  favor,  they  can  defy  the  people  and  continue  their 
oppressions. 

SIXTH. — Popular  Measure  of  JRelief  Discussed. —  The  Nature  of 
the  Reform  Needed. — We  recognize  no  higher  human  power 
than  the  will  of  the  people.  When  the  servants  of  the  people, 
elected  and  appointed  to  represent  their  interests  in  legislative 
bodies,- or  to  decide  upon  questions  affecting  public- interests, 
prove  recreant  to  the  trusts  and  interests  confided  to  them,  the 
people — the  sovereign  power — can  remove  them  in  the  method 
provided  by  the  fundamental  law,  or,  if  this  cannot  be 
effected,  then  the  people  have  the  right,  the  God-given  right, 
to  resort  to  nature's  first  law  for  self-preservation.  If  by  leg 
islation  the  rights  of  the  people  are  taken  from  them,  then 
that  power,  retained  by  the  whole  people  to  be  exercised  when 
their  rights  are  Defused  them — that  power  which  is  inherent 
in  the  supreme  rulers  of  our  country — can  be  exercised.  Un 
der  our  system  of  government  it  should  not  be  asserted  save 
in  the  last  extremety.  When  all  other  means  fail ;  when  re 
dress  can  be  obtained  in  no  other  way,  then  the  people,  as 
supreme  rulers,  should  arise  in  their  majesty,  and,  by  the  exer 
cise  of  their  reserved  rights,  take  what  their  servants  have  de 
nied  them.  As  a  people,  we  have  not  yet  reached  the  point 
which  would  justify  extreme  measures.  While  the  different 
monopolies  of  which  we  have  been  treating,  by  their  shrewd 
management,  by  the  use  of  their  money,  and  by  concert  of 
action,  have  obtained  almost  unlimited  control  of  all  the  de 
partments  of  the  government,  numerically  they  comprise  but 
a  small  part  of  the  population  of  the  country.  Their  success 
is  to  be  attributed  to  two  causes :  their  systematic  organiza 
tion,  and  their  unlimited  control  of  the  finances  of  the  coun 
try.  We  might  add,  as  a  further  cause  of  their  success,  the 
36 


290  MONOPOLIES   AND   THE    PEOPLE. 

inattention  of  a  large  majority  of  the  people  to  the  political 
affairs  of  the  country,  and  their  willingness  to  follow  a  few 
political  leaders,  to  whom  they  seem  to  have  entrusted  the  en 
tire  control  of  the  politics  of  the  country.  As  a  rule,  we  sub 
mit  to  wrongs  in  the  administration  of  the  affairs  of  states,  as 
well  as  the  national  government,  until  we  individually  suffer 
from  their  maladministration,  then,  what  has  been  termed  the 
"  sober  second  thought  of  the  people "  manifests  itself,  and 
reforms  are  effected.  The  situation  of  the  affairs  of  the  nation, 
and  the  great  power  that  the  monopolists  have  obtained  in  the 
land,  have  aroused  that  "  sober  second  thought,"  and  never  in 
the  history  of  our  government  has  there  been  more  urgent 
need  of  action  on  the  part  of  the  people.  Never  were  issues 
presented  that  demanded  more  earnestly  the  united  efforts  of 
all  who  love  and  prize  constitutional  liberty.  The  evils  of 
which  we  have  been  treating  can  be  remedied  by  demanding 
of  all  who  fill  official  positions  a  recognition  of  the  superior 
binding  force  of  the  constitution.  It  is  not  to  be  expected 
that  those  men  filling  official  places  in  the  legislative  and  judi 
cial  departments  of  the  government,  who,  from  interest  and 
custom,  have  become  addicted  to  the  habit  of  giving  new  mean 
ings  and  interpretations  to  the  constitution,  will  reform  the 
abuses  that  have  been  rapidly  accumulating,  or  that  they  will 
manifest  any  zeal  or  alacrity  in  stripping  the  railroad  corpora 
tions  and  other  monopolies  of  the  great  powers  conferred  upon 
them,  or  that  any  real  reformation  can  be  effected  without  a 
thorough  change  of  public  servants.  No  matter  what  political 
party  has  control  of  the  government,  or  to  what  party  the  men 
selected  to  fill  the  different  offices  belong,  or  with  what  polit 
ical  organizations  they  affiliate,  unless  they  acknowledge  the 
superior  binding  force  of  the  fundamental  law  they  should 
be  requested  to  vacate  their  official  positions,  and  their  places 
should  be  filled  by  men  who  are  willing  to  acknowledge  the 
binding  force  of  the  constitution,  and  will  pledge  themselves 
to  abstain  from  judicial  legislation.  Men  elected  to  congress 
and  state  legislatures  are  the  servants  of  the  people,  elected  to 
protect  their  interests;  hence,  their  will  should  control  the 
action  of  members  of  congress  and  state  legislatures.  Being 
elected  to  serve  the  people  and  not  to  promote  selfish  interests 


CONCLUSION.  291 

or  support  class  legislation,  the  people,  before  supporting  any 
candidate  for  a  legislative  office,  should  demand  of  him  a 
pledge  to  labor  for  and  support  only  such  measures  as  will 
tend  to  a  restoration  of  the  rights  that  have  been  taken  from 
and  denied  to  them,  and  by  special  charters  and  grants  con 
ferred  upon  corporations  and  other  monopolies.  Railroad 
corporations  being  created  by  legislative  grants,  their  business 
being  that  of  common  carriers  for  hire,  the  legislature  pos 
sesses  full  power  to  enact  such  laws  as  will  limit  and  restrict 
their  charges  for  transportion  to  a  reasonable  tariff,  prohibit 
and  punish  extortions  and  unjust  discriminations,  and  provide 
for  the  swift  infliction  of  penalties  whenever  the  laws  are  vio 
lated.  Before  the  people  elect  any  man  to  a  legislative  office, 
he  should  pledge  himself  to  support  and  obey  the  require 
ments  of  the  constitution,  and  to  abstain  from  that  bane  of 
a  republican  government,  special  class  legislation.  By  sup 
porting  only  such  men  as  would,  in  good  faith,  pledge  them 
selves,  as  above  suggested,  and  who,  as  legislators,  would 
abide  by  their  pledges,  unjust  discriminations  would  cease,  and 
some  of  the  rights  of  the  people  would  be  restored.  But  re 
forms  must  extend  beyond  the  points  named.  Railroad  com 
panies  being  chartered  and  railroads  constructed  for  the  prose 
cution  of  the  business  of  common  carriers,  having  recived  aid 
in  lands  and  bonds  from  the  general  government,  and  from 
states,  counties,  cities,  and  towns,  bonds  and  taxes,  as  well  as 
special  privileges  not  granted  to  any  other  corporations,  in  con 
templation  of  law,  these  companies  are  bound  to  act  honestly. 
It  was  never  the  intent  of  the  legislatures  (if  they  acted  in 
good  faith)  to  create  these  powerful  corporations,  to  grant 
them  extraordinary  aid  and  privileges,  and  then  allow  them,  by 
false  and  fictitious  reports  as  to  the  cost  of  their  roads,  to 
charge  unjust  prices  for  carrying  freights  and  passengers.  By 
the  watering  process  to  which  we  have  referred,  the  pretended 
cost  of  the  roads,  as  shown  from  their  reports,  is  often  two  or 
three  times  the  actual  cost,  and  the  rates  that  are  charged  for 
transportation  are  such  as  to  pay  dividends  not  only  on  the  cost 
of  the  road,  but  on  the  fictitious  or  added  stock.  Indeed,  in 
many  cases  the  stock  reported  as  paid  up  is  not  paid  in  a 
legitimate  manner;  but  when  the  company  is  organized,  by 


292  MONOPOLIES   AND   THE   PEOPLE. 

selling  bonds  it  builds  its  road  from  the  proceeds,  and  from 
the  earning  of  the  road  pays  riot  only  the  interest  on  its  bonds 
but  accumulates  a  surplus.  This  surplus  is  divided  among  the 
stockholders,  not  as  dividends  on  their  paid-up  stock,  but  is 
capitalized  arid  stock  issued  to  subscribers.  The  road  is  made 
to  pay  the  interest,  and  eventally  the  principal,  of  the  capital 
borrowed  to  build  it,  and  also  to  earn  money  enough  to  show 
a  paid-up  capital  to  the  amount  of  the  actual  cost  of  the  road. 
This  species  of  financiering  on  the  part  of  the  company  is 
robbing  the  people,  and  abusing  the  privileges  conferred  by 
the  charter.  No  thorough  reform  of  the  abuses  practiced  by 
railroad  companies  can  be  effected  until  the  legislatures,  by 
statutes,  compel  each  and  every  company  to  purge  its  stock  of 
every  spurious  dollar,  so  that  the  stock  of  each  company  shall 
not  appear  to  be  in  excess  of  the  cost  of  its  road.  If  the  leg 
islature  does  not  possess  the  power  to  do  this,  then  it  has  the 
power  to  create  a  corporation  that,  by  arbitrarily  increasing  its 
stock  to  any  amount  it  may  choose,  can  extort  from  the  people 
sufficient  to  pay  the  interest  upon  such  amount,  and  defy  the 
power  of  its  creator.  The  position  is  not  sound.  Any  and 
all  abuses  practiced  by  railroad  corporations  can  be  corrected 
by  legislative  enactment,  unless  we  admit  that  the  creature  is 
greater  than  the  creator. 

But  it  is  claimed  that  if  the  legislatures  should  by  statute 
compel  railroad  companies  to  reduce  their  stock  to  the  cost  of 
constructing  their  roads,  or  to  their  actual  value,  and  then 
limit  their  tariff  of  charges  to  reasonable  rates,  great  injustice 
would  be  done  the  innocent  holders  of  their  bonds ;  that  such 
reduction  would  render  it  impossible  for  them  to  pay  either 
the  interest  or  principal  of  these  bonds;  that  such  statutes 
would  impair  the  obligations  of  contracts ;  that  many  of  the 
bonds  are  held  by  widows  and  orphans,  who  would  be  ruined. 
This  may  or  may  not  be  true.  If  true,  who  is  responsible  for 
it?  Certainly  not  the  states  or  the  people.  Originally  the 
bonds  were  purchased  of  the  railroad  companies.  If  these 
companies  by  false  representations  have  obtained  credit  on 
their  roads  to  two  or  three  times  their  actual  value,  the  com 
panies  are  the  responsible  parties,  and  not  the  public.  While 
innocent  persons  may  suffer,  their  suffering  results  from  their 


CONCLUSION.  293 

own  imprudence,  or  it  is  a  misfortune  occasioned  by  the  fraud 
of  the  railroad  company.     There  is  no  justice  in  allowing  these 
companies  to  extort  from  the  people  money  sufficient  to  relieve 
themselves  from  the  consequences  of  their  frauds.     A  owns 
a  farm  worth  $2,000 ;  he  represents  it  to  be  worth  $6,000,  and 
by  reason  of  this  false  representation  obtains  from  B  a  loan  of 
$4,000,  secured  by  a  mortgage  on  this  farm.     He  fails  to  pay 
the  money  borrowed,  and  B  forecloses  his  mortgage,  and  sells 
the  farm.    It  pays  but  one-half  his  judgment  or  decree.  Would 
B  have  any  claim  upon  the  public  for  the  balance  of  his  debt  ? 
He  made  his  own  contract,  and  expected  a  profit  on  his  invest 
ment,  but  was  disappointed.     Under  the  law  A  had  full  au 
thority  to  mortgage  his  land,  and  B  had  the  option  of  loaning 
his  money  to  A  and  taking  a  mortgage.     He  acted  in  good 
faith,  and  believed  his  security  was  ample,  but  was  mistaken. 
Is  there  any  difference  in  principle  between  the  case  of  A  and 
B  and  the  purchasers  of  railroad  bonds  ?     Both  parties  will 
suffer  loss  because  of  the  fraud  of  the  party  with  whom  they 
dealt.     Neither  have  any  claim  upon  the  public  in  law  or  in 
equity,  and  both  must  look  to  the  parties  with  whom  they  con 
tracted.     The  charters  to  railroad  companies  empowered  them 
to  transact  business,  but  did  not  empower  them  to  commit 
frauds,  by  mortgaging  their  roads  for  three  times  their  actual 
value.     To  require  railroad  companies  to  act  honestly   and 
charge  reasonable  rates  for  carrying  freights,  does  not  impair 
the  obligations  of  any  contract.     NOT  does  it,  to  compel  them 
to  reduce  their  stock  to  what  it  actually  should  be,  measured 
by  the  value  of  their  roads.     The  legislature  should  be  com 
posed  of  men  who  are  not  embarrassed  by  personal  interest, 
and  who  have  not  received  briber.     We  do  not  claim  that  be 
cause  of  the  fact  that  men  are  stockholders  or  directors  in 
railroad  companies  they  are  disqualified  for  seats  in  the  legis 
latures  of  states,  or  of  congress.     But  do  insist  that  when 
men  are  elected  for  the  express  purpose  of  advocating  the  in 
crease  of  the  already  too  great  powers  and  privileges  conferred 
upon  corporations,  they  prostitute  their  offices  to  base  and  ille 
gitimate  purposes.     When  the  sole  aim  of  men  elected  to  rep 
resent  the  people  is  demonstrated  to  be  to  defeat  every  meas 
ure  designed  to  relieve  them  from  the  effect  of  unjust  laws, 


294  MONOPOLIES   AND   THE    PEOPLE. 

and  to  correct  abuses  practiced  by  the  combined  influence  of 
corporations,  they  dishonor  the  place  they  fill.  The  rights  of 
the  people  can  be  neither  restored  nor  preserved,  until  legis 
latures  are  purged  of  this  class  of  men.  Men  who  receive 
any  remuneration  from  any  man,  class  of  men,  or  corpora 
tions,  paid  or  bestowed  for  the  purpose  of  securing  friendly 
legislation,  are  unfit  to  represent  the  people.  It  makes  no  dif 
ference  whether  the  consideration  is  paid  in  money,  or  in  passes 
over  the  railroads;  it  is  given  as  a  bribe.  Passes  are  called  com 
plimentary  ;  they  are  accepted  as  complimentary,  yet  it  is  a 
fact  that  these  complimentary  passes  are  placed  where  they 
"will  do  the  most  good."  They  are  given  to  congressmen, 
legislators,  judges  of  courts,  and  executive  officers.  If  it  were 
necessary  to  offer  proof  that  these  passes  were  intended  as 
bribes,  we  need  only  look  at  the  manner  of  their  distribution 
to  the  members  of  the  last  Iowa  legislature.  They  were  dis 
tributed  among  those  friendly  to  legislation  in  favor  of  rail 
roads,  and  withheld  from  those  opposed  to  such  legislation. 
If  passes  are  purely  complimentary,  this  was  wrong;  but  if 
they  are  given  as  bribes  it  was  the  proper  distribution  of  them. 
The  legislator  who  accepts  a  pass,  and  the  party  giving 'it, 
should  be  punished  under  the  provisions  of  the  statutes  against 
"bribery  and  corruption  in  office."  And  the  provisions  of  the 
same  statutes  ought  to  be  enforced  against  all  persons  holding 
official  positions  in  the  states,  and  in  the  general  government. 
If  officers  cannot  afford  to  pay  for  travel  over  railroads  on 
their  present  salaries,  increase  them  so  as  to  make  them  inde 
pendent  of  railroad  companies,  who  estimate  official  integrity 
as  being  equal  in  value  to  a  pass  over  their  respective  roads. 
History  demonstrates  that  in  some  cases  these  passes  have  been 
received  as  full  consideration  for  official  influence.  Legisla 
tures  possess  the  power  to  regulate  and  control  railroad  com 
panies,  and  should  exercise  that  power  in  every  case  of  abuse 
of  their  privileges  by  the  railroad  companies.  Some  deny  the 
power  of  legislatures  to  compel  railroad  companies  to  reduce 
their  stock  to  the  actual  cost  of  their  roads.  This  power  is 
lodged  in  some  department  of  government.  "We  are  not  pre 
pared  to  admit  that  these  corporations  are  supreme ;  that  they 
can  openly,  and  in  defiance  of  law,  and  the  rights  of  the  gov- 


CONCLUSION.  295 

ering  power,  practice  frauds,  which,  if  practiced  by  an  indi 
vidual  ,  would  consign  him  to  prison.  If  the  legislature  does  not 
possess  it,  the  courts  certainly  do,  as  we  will  hereafter  demon 
strate.  We  have  shown  that  by  the  manner  of  building  roads 
with  borrowed  capital  obtained  by  sale  of  bonds,  and  by  ex 
tortionate  charges  for  transportation,  making  their  roads  earn 
sufficient  to  pay  dividends  on  stock  which  had  not  been  paid, 
as  well  as  on  the  watered  stock,  the  railroad  companies  in  the 
United  States  whose  roads  cost  $2,456,230,000,  yet  in  fact  rep 
resenting  the  enormous  sum  of  $6,236,638,749,  in  what  pur 
ports  to  be-paid-up  capital  stock,  and  bonds,  were  robbing  the 
people. 

The  question  we  are  now  discussing  is,  How  to  remedy 
these  evils.  Our  attempt  thus  far  has  been  to  demonstrate  the 
fact  that  the  remedy  is  exclusively  within  the  state  authorities, 
and  not  in  those  of  the  United  States,  and  that  railroad  com 
panies  are  private,  and  not  public.  Adhering  to  these  views, 
we  contend  that  railroad  companies  are  subject  to  taxation  at 
the  same  rate  on  the  assessed  value  of  their  property  as  an  in 
dividual  ;  and  the  legislature  cannot  adopt  a  different  rule  for 
taxing  railroad  property  without  disregarding  the  letter  and 
spirit  of  the  constitution.  The  chartering,  regulating,  and 
controlling  of  railroad  companies,  and  all  corporations  created 
for  pecuniary  profit,  must  remain  with  the  states.  To  concede 
the  exercise  of  this  power  to  the  national  administration  is  to 
overturn  republican  government  and  take  from  the  people  the 
rights  and  powers  reserved  to  them  and  the  states ;  create  a 
great  central  power  without  constitutional  limit  or  restitution, 
but  governed  by  the  personal  views  of  those  in  office.  We 
have  treated  of  this  subject  in  the  preceding  pages,  and  refer 
to  it  here  in  considering  the  remedies  for  the  evils  endured  by 
the  people.  We  know  that  congress  has  granted  charters  to 
corporations  organized  for  pecuniary  profit,  and  that  United 
States  courts  have  taken  jurisdiction  of  cases  arising  under 
state  statutes,  and  disregarded  the  action  of  state  legislatures 
and  state  courts  on  questions  affecting  the  interests  of  railroad 
corporations,  and  have  also  decided  that  congress  possesses  the 
power  to  charter  railroad  companies.  But  we  do  not  recog 
nize  the  decisions  as  right,  nor  do  we  believe  they  will  remain 


296  MONOPOLIES    AND    THE    PEOPLE. 

long  unreversed.  The  opinion  generally  prevails  that  railroad 
corporations  have  abused,  and  are  abusing,  their  charters ; 
that  they  are  oppressing  the  people;  that  there  must  be  a  re 
form  of  the  abuses  practiced  by  them.  But  differences  of 
opinion  exist  as  to  the  means  to  be  applied.  If  we  recognize 
the  people  as  the  source  of  power,  and  that  they  retain  all  the 
power  they  have  not  delegated  to  the  government,  the  more 
nearly  the  interests  of  the  people  and  the  companies  approach 
each  other,  the  more  closely  they  can  be  blended  and  united, 
and  the  more  readily  can  abuses  be  corrected.  To  divide  their 
rights  and  interests;  to  provide  different  governments,  and 
rules  of  decisions  for  them ;  to  make  the  people  amenable  to 
state  authority,  while  the  United  States  authority  takes  control 
of  corporations,  will  create  rival  interests,  and  render  railroad 
companies  independent  of  the  people.  If  the  congress  of  the 
United  States,  claiming  to  have  the  constitutional  right,  should 
provide  by  statute  for  transferring  the  exclusive  control  of 
railroad  corporations  to  the  United  States,  an  entire  change  of 
the  relation  between  the  states  and  the  general  government 
would  be  the  result.  The  states  would  not  have  the  power  to 
redress  any  abuses  of  the  charter  privileges  granted  to  these 
companies,  either  by  legislative  enactment  or  by  judicial  decis 
ions.  Railroad  companies  created  by  state  legislatures,  and 
hitherto  subject  to  the  jurisdiction  of  the  state  courts,  would 
be  released  from  all  obligations  to  state  government,  and  from 
the  control  of  state  legislatures  and  courts.  The  congress  of 
the  United  States  and  the  federal  courts  would  have  exclusive 
control  and  jurisdiction  over  them,  and  constant  confusion  and 
conflicts  of  jurisdiction  would  naturally  follow.  Such  a  course 
would  confer  upon  railroad  companies  still  greater  power,  and 
place  in  their  hands  more  efficient  means  for  oppressing  the 
people.  Another  evil  resulting  from  such  a  course  would  be, 
that  the  whole  corporate  interest  of  the  country  could  combine 
and  concentrate  their  whole  influence  for  the  purpose  of  accom 
plishing  any  desired  object.  Now  both  congress  and  state  legisla 
tures  must  be  bought  over  to  their  support ;  but  if  the  United 
States  government  should  take  the  whole  control  of  corporations 
and  railroad  companies,  the  whole  railroad  force  of  the  country, 
from  the  men  who  own,  manage,  and  control  this  great  inter- 


CONCLUSION.  297 

est,  to  the  most  menial  employes,  could  be  directed  to  a  single 
purpose  —  that  of  securing  congressional  favor. 

Now,  state  legislatures  must  be  approached,  and  persuaded, 
as  well  as  congress  ;  then  a  single  legislative  body,  and  that 
one  the  farthest  removed  from  the  people,  would  be  the  only 
body  to  claim  the  attention  of  this  great  corporate  interest. 
When  grants  were  once  made  to  railroad  companies,  and  priv 
ileges  conferred  upon  them,  it  would  be  simply  impossible  to 
effect  any  change,  no  matter  how  oppressive  they  might  be 
upon  the  people.  The  idea  that  railroads  are  public  highways, 
and  that  railroad  companies  are  public  corporations,  already 
obtains  among  congressmen  and  in  the  supreme  court  of  the 
United  States.  This  is  well  understood  among  railroad  men, 
as  well  as  the  fact  that  there  is  an  increasing  demand  on  the 
part  of  the  people  for  the  reform  of  the  many  abuses  that  are 
now  practiced  by  them.  Hence  their  anxiety  to  have  the 
United  States  government  assume  control  of  railroad  corpora 
tions.  They  desire  it  for  another  reason :  Most  of  the  special 
favors  and  grants  they  have  received  have  been  the  result  of 
bargain  and  sale.  The  same  means  will  be  used  in  the  future 
unless  a  thorough  reform  is  effected,  and  it  will  cost  the  cor 
porate  interests  of  the  country  less  to  deal  with  one  body  rep 
resenting  all  the  states  than  it  would  to  deal  with  the  legisla 
tures  of  all  the  states.  Another  reason  for  this  desire  on  the 
part  of  railroad  companies  is,  that  the  supreme  court,  as  now 
formed,  is  in  full  sympathy  with  them  upon  the  points  at  issue 
between  corporations  and  the  people. 

Careful  consideration  and  examination  of  this  question  will 
satisfy  the  people  that  their  only  hope  for  the  restoration  and 
preservation  of  their  rights  in  the  conflict  now  existing  be 
tween  themselves  and  the  railroad  companies  is  in  states  re 
taining  exclusive  jurisdiction  and  control  of  all  the  railroad 
corporations  and  railroads  within  their  respective  borders. 
Another  remedy  suggested  is,  for  the  general  government  to 
purchase  and  own  all  the  railroads  in  the  country,  and  control 
them  in  the  future.  If  this  plan  were  feasible,  it  is  of  doubtful 
wisdom.  The  purchase  could  not  be  made  without  the  con 
stant  of  the  owners  of  the  roads.  This  consent  could  only  be 
obtained  upon  payment  of  the  prices  demanded,  because  rail- 
37 


298  MONOPOLIES   AND    THE    PEOPLE. 

road  stock  is  not  such  property  as  can  be  condemned  for  pub 
lic  use.  It  is  not  to  be  expected  that  the  companies  owning 
the  stocks  and  roads  would  sell  for  less  than  cost ;  and  this 
cost  would  be  the  amount  of  money  represented  by  the  roads. 
This  we  have  shown  is  over  $6,000,000,000.  To  pay  less  than 
this  amount  (being  nearly  three  times  their  actual  cost)  would 
be  aiding  the  companies  to  defraud  their  creditors,  for  the  rea 
son  that  the  roads  are  the  only  security  the  bondholders  have. 
The  purchase  of  the  roads  would  increase  the  national  debt  to 
the  amount  paid  for  them,  and  impose  additional  burdens  in 
the  shape  of  taxes  upon  the  people.  It  would  add  to  the  list 
of  government  officers  and  employes  at  least  two  hundred 
thousand  men,  whose  influence  could  be  relied  upon  when  the 
interests  of  the  people  and  those  persons  in  office  conflicted. 
It  may  be  said  that  the  government  would  not  operate  the 
roads,  but  would  lease  them.  Would  this  aiford  relief?  It 
would  require  two  parties  to  make  the  contract.  The  con 
tractor  would  agree  to  pay  a  certain  stipulated  amount  for  the 
use  of  the  road.  He  would  then  fix  his  own  rate  of  charges 
for  transportation,  and  being  only  a  lessee,  would  be  virtually 
irresponsible.  Government  could  not  fix  the  price  to  be  paid 
for  the  use  of  the  road,  and  also  the  tariff  of  charges.  But  the 
lessee  would  demand  the  right  to  fix  his  own  tariff  in  order 
that  he  might  have  sufficient  to  make  repairs,  pay  for  the  use 
of  the  road,  and  make  his  profit.  This  system  would  be 
subject  to  the  abuses  of  which  the  shippers  now  complain.  Ir 
responsible  persons  would  often  have  control  of  these  roads,  or 
a  part  of  them,  and  a  wide  field  would  be  open  for  fraud  and 
irregular  practices.  The  wants  of  the  people  demand  some 
other  and  cheaper  mode  of  transportation;  either  a  cheaper 
system  of  building  and  operating  railroads,  so  that  the  tariffs 
can  be  reduced,  or  some  new  method.  The  present  roads  may 
be  superseded  and  another  kind  adopted.  In  that  case,  the 
present  railroad  system  would  become  of  little  value,  and 
would  prove  a  loss  to  the  government.  Last  of  all,  the  general 
government  cannot  go  into  the  railroad  business  without  con 
travening  the  provisions  of  the  constitution.  In  addition  to 
the  above  reasons  why  the  government  should  not  become  the 
owner  of  the  railroads,  is  this  one,  which  outweighs  all  others: 


CONCLUSION.  299 

It  would  place  them  entirely  beyond  the  control  of  the  people. 
If  the  control  of  corporations  is  left  to  the  states,  they  are  in 
the  hands  of  the  people;  each  county,  town,  and  neighbor 
hood,  can  bring  its  influence  to  bear  upon  the  questions  at 
issue.  In  the  election  of  congressmen  and  other  United  States 
officers,  local  issues  are  lost  sight  of.  National  questions  en 
gage  the  public  mind,  while  in  the  election  of  members  of  the 
state  legislatures  and  other  state  officers,  local  questions  enter 
largely  in  the  canvass.  Numerically,  the  monopolists  are  but 
a  small  fraction  of  the  people ;  their  great  strength  lies  in  the 
control  they  have  obtained  over  the  business  and  finances  of 
the  country.  The  people,  united  against  the  monopolists,  can 
elect  whom  they  choose  to  any  state  office,  and  can  secure  a 
majority  in  their  favor.  The  remedy  is  in  their  owr  hands, 
and  by  united  action  they  cannot  fail  of  success.  If  a  reform 
is  ever  effected,  if  the  people  ever  regain  their  lost  rights,  they 
must  commence  at  the  ballot  box.  The  producers  throughout 
the  west  and  south  are  largely  in  the  majority ;  they  can  elect 
their  own  men.  If  they  fail  to  do  so,  if  they  do  not  themselves 
apply  the  remedy,  they  ought  not  to  complain  of  others  be 
cause  they  do  not  apply  it  for  them.  There  need  be  no  diffi 
culty  or  delay  in  effecting  reforms  dependent  upon  legislative 
action,  provided  the  people  are  true  to  their  own  interests. 
They  elect  their  agents  to  act  for  them.  If  they  do  not  elect 
men  who  are  with  them  in  principle,  sympathy,  and  feeling, 
they  ought  not  to  complain. 

But,  says  the  reader,  admitting  that  legislative  reform  can 
be  accomplished,  how  can  the  decisions  of  the  courts  be 
changed  ?  This  question  presents  more  difficulty.  It  has  been 
the  custom  from  time  immemorial  for  courts  to  be  governed 
and  controlled  by  precedents.  This  is  adopted  in  order  that 
the  law  may  be  settled  and  certain.  When  questions  arise 
under  statutes,  the  meaning  of  which  is  ambiguous,  resort  is 
had  to  former  decisions  under  like  statutes,  for  a  rule  of  con 
struction,  and  thus  the  law  is  settled.  We  accept  the  decis 
ion  as  the  law  of  the  land,  and  to  criticise  it  is  seemed  discour 
teous  to  the  court  making  it.  To  call  in  question  the  motives 
of  the  courts,  or  to  doubt  their  wisdom,  is  deemed  rank  "trea 
son."  The  rule  governing  them  may  be  of  ancient  date;  the 


300  MONOPOLIES    AND   THE    PEOPLE. 

reason  for  its  adoption  may  have  long  since  ceased;  the  rule 
itself  may  be  obsolete.  Yet,  to  find  a  precedent  for  a  decis 
ion  that  outrages  justice  and  is  at  war  with  the  best  interests 
of  the  people,  but  in  favor  of  the  corporate  interests  of  the 
country,  this  old  rule  is  dragged  from  its  long  repose  and 
made  the  basis  of  new  decisions.  Most  of  these  old  prece 
dents  originated  in  monarchical  countries,  where  all  doubtful 
questions  were  construed  in  favor  of  the  crown,  and  where  the 
rights  of  the  people  always  yielded  to  kingly  prerogative. 
While  precedents  should  have  their  true  weight  in  determin 
ing  between  private  parties,  when  none  of  the  great  questions 
arise  affecting  the  national  welfare,  and  while  interpretations 
of  the  constitution,  acquiesced  in  for  many  years,  should  re 
main  as  the  settled  law  of  the  land,  and  be  observed  by  the 
courts,  the  practice  of  solving  constitutional  problems  by  re 
sort  to  old  monarchical  precedents,  and  the  adoption  of  the 
reasoning  of  the  high  courts  of  the  king's  exchequer,  should  not 
be  tolerated  in  a  republic.  Our  form  of  government  is  new. 
Our  courts  should  be  the  courts  of  the  people,  and  not  a  star 
chamber  for  the  protection  and  perpetuation  of  the  monarchical 
dogma,  that  "it  is  absolutely  essential  to  independent  national 
existence  that  government  should  have  a  firm,  hold  of  the  two 
great  sovereign  instrumentalities  of  the  sword  and  the  purse," 
as  was  declared  by  the  supreme  court  of  the  United  States,  in 
December,  1871.  Such  declarations  are  at  war  with  our  ideas 
of  republican  government.  It  has  no  support  save  in  despotic 
governments  and  decisions  emanating  from  them;  yet  it  is  the 
doctrine  that  must  obtain,  if  the  recent  decisions  of  the  su 
preme  court  are  to  remain  as  the  settled  law  of  the  nation. 
To  accept  this  doctrine  as  a  final  exposition  of  the  relative 
rights  of  the  people  and  the  government,  is  to  acknowledge 
that  the  agents  and  servants  of  the  people,  elected  and  ap 
pointed  to  office,  become  their  masters,  clothed  with  imperial 
powers. 

It  is  not  only  in  the  adoption  of  old  precedents  that  the 
rights  of  the  people  have  been  denied  in  courts,  but  by  wrest 
ing  the  meaning  of  the  earlier  decisions  made  by  the  distin 
guished  men  who  graced  the  bench  of  the  supreme  court  in 
its  earlier  and  purer  days.  The  "  Dartmouth  College  "  ease 


CONCLUSION.  301 

was  the  first  in  which  the  rights  of  states  or  the  people  to  in 
terfere  with  charter  privileges  was  determined.  We  have  giv 
en  the  history  of  this  case  in  preceding  pages.  It  in  no  sense 
justifies  or  supports  the  recent  decisions  of  the  court,  as  to  the 
rights  and  privileges  of  corporations  organized  for  pecuniary 
profit.  Yet,  taking  the  decision  in  that  case  as  a  precedent, 
the  supreme  court  has  gradually  encroached  upon  the  rights 
of  the  people,  until,  under  its  latest  decisions,  railroad  corpo 
rations  are  public  corporations,  their  roads  are  public  high 
ways,  and  the  property  of  all  the  tax-payers  can  be  taxed,  and 
the  taxes  thus  collected  can  be  used  by  these  private  corpora 
tions  to  pay  for  building  and  repairing  their  roads.  This  is 
the  latest  new  departure,  and  with  the  "  Legal  Tender  "  decis 
ion,  makes  the  interest  of  the  whole  people,  as  well  as  the 
value  of  their  property,  depend  upon  the  action  of  corpora 
tions. 

No  good  reason  can  be  shown  why  the  decisions  of  courts 
should  not  be  subjected  to  criticism,  the  same  as  the  acts  of 
legislative  bodies.  The  courts  are  a  co-ordinate  branch  of  the 
government,  but  with  a  power  greater  than  that  of  the  legisla 
tive  and  executive  branches  combined.  The  decisions  of  courts 
render  nugatory  the  acts  of  the  other  departments  of  the  gov 
ernment.  To  admit  that  the  decisions  of  the  judiciary  cannot 
be  questioned,  is  to  concede  to  it  all  the  prerogatives  possessed 
by  absolute  tyrants.  Not  only  have  the  people  the  right  to 
question  the  decisions  of  the  courts,  and  if  need  be  to  examine 
the  motives  which  prompted  them,  but  also  to  know  the  views 
of  the  men  who  aspire  to  judicial  positions,  upon  all  questions 
of  a  general  and  public  nature.  No  candidate  for  judicial  po 
sition  should  be  expected  to  form  an  opinion  upon,  or  decide 
a  question  affecting  the  rights  of  parties  until  it  had  been 
finally  submitted.  But,  upon  the  great  questions  that  fre 
quently  arise  affecting  the  public  welfare,  his  views  should  be 
publicly  known.  Let  the  people  understand  the  views  of  the 
men  seeking  for  a  seat  on  the  bench,  before  his  election,  and 
judicial  legislation  and  partisan  decisions  will  soon  disappear. 
The  judges  of  the  supreme  court  of  the  United  States  hold 
their  offices  for  life,  by  appointment;  that  court  is  further  re 
moved  from  the  people  than  state  courts.  Reforms  are  not 


302  MONOPOLIES  AND  THE  PEOPLE. 

easily  effected.  Judges  recently  appointed  received  their  ap 
pointment  because  of  their  understood  views  upon  certain 
public  questions.  The  course  of  decisions  of  this  court  dem 
onstrates  that  the  rights  of  the  people  are  considered  of  less 
importance  than  the  demands  of  corporations,  in  cases  of  con 
flict.  While  the  present  system  of  selecting  these  judges  con 
tinues,  with  their  life  terms,  it  will  be  hard  for  the  people  to 
regain  their  rights.  There  are  times  when,  because  of  oppres 
sions,  the  people  have  the  right  to  demand  changes  in  the 
fundamental  law.  At  the  present  time  they  are  demanding 
redress;  they  are  asking  to  be  relieved  from  the  unjust  bur 
dens  imposed  upon  them  by  companies  and  corporations,  who 
are  petted  and  supported  by  the  supreme  court.  But  one  cer 
tain  means  is  left  them,  and  that  is  an  amendment  to  the  con 
stitution,  restricting  their  term  to  a  certain  number  of  years, 
and  providing  for  their  election  by  the  people.  We  could  then 
free  ourselves  from  the  burdens  imposed  upon  us  by  this  anti- 
republican  department  of  our  national  government,  and  take 
from  corporations  some  of  their  oppressive  powers  and  privi 
leges,  now  assured  to  them  by  the  decisions  of  the  supreme 
court.  If  any  relief  is  afforded  the  people  from  the  oppres 
sions  under  which  they  now  suffer,  they  must  obtain  it  through 
their  own  efforts.  No  other  channel  is  now  open.  All  of  the 
departments  of  the  government,  state  and  national,  are  more 
or  less  controlled  by  the  monopolies  against  which  the  farmers 
are  now  preparing  to  fight.  The  silent  ballot  is  the  weapon 
to  use ;  when  used  by  a  united  people  victory  is  assured.  It 
is  more  potent  than  all  the  appliances  of  an  army ;  more  thor 
ough  in  its  execution  than  the  bullet.  It  is  the  dread  of  the 
unfaithful  legislator,  dishonest  office-holder,  and  the  unjust 
judge.  It  strikes  terror  into  the  hearts  of  the  unscrupulous 
men,  who  are  willing  to  sacrifice  honor,  country,  and  future 
happiness  for  the  purpose  of  amassing  wealth,  by  extortions 
practiced  upon  the  sweating,  toiling  millions  who  till  the 
ground.  While  partial  relief  may  be  obtained  through  other 
channels,  real,  genuine,  and  lasting  redress  can  only  be  ob 
tained  by  organized  action  at  the  polls. 

How  can  the  abuses  of  the  transportation  system  be  cor 
rected  ?     This  question  is  now  having  a  practical  test  in  Illi- 


CONCLUSION.  303 

nois,  and  is  being  discussed  throughout  the  country.  It  is  be 
ing  demonstrated  that  a  pro  rata  tariff  will  not  afford  relief; 
and  that  some  other  means  must  be  adopted.  What  that  may 
be,  time  will  develop.  No  uniform  pro  rata  tariff  would  be 
just  to  either  the  companies  or  the  people.  The  shipping  of 
way  freights  is  always  attended  with  more  proportionate  ex 
pense  and  delay  than  at  prominent  and  terminal  points.  The 
extensive  shipper,  who  loads  a  large  number  of  cars  for  a  sin 
gle  train,  should  be  allowed  more  favorable  rates  than  the  one 
who  ships  at  some  way  station  but  one  car  of  freight  at  long 
intervals.  The  real  cause  of  complaint  is  the  uniformly  ex 
orbitant  rates  charged  for  carrying  freights,  in  connection  with 
the  present  warehouse  and  elevator  system.  The  legislatures 
and  the  courts  are  clothed  with  full  power  to  prevent  oppres 
sive  or  unjust  charges  for  carrying  freight.  They  care  not 
how  much  per  cent  the  companies  shall  make  upon  their  in 
vestments;  but  when  their  charges  amount  to  an  abuse  of 
their  charter  privileges  the  legislatures  and  the  courts  can  cor 
rect  them.  The  rule  established  by  railroad  companies,  to 
force  from  shippers  such  rates  as  will  pay  interest  or  dividends 
upon  an  amount  of  imaginary  stock,  is  unjust.  The  process 
by  which  they  increase  their  stock  to  two  or  three  times  the 
amount  invested  is  fraudulent.  The  legislatures  and  the  courts 
possess  the  powor  to  compel  railroad  companies  to  make  a  re 
turn  of  the  actual  amounts  of  money  invested  in  their  respect 
ive  roads,  in  order  to  determine  whether  their  charges  are  ex 
cessive  and  oppressive.  Railroad  companies  being  dependent 
upon  state  legislatures  for  such  grants  as  will  enable  them  to 
construct  their  roads,  and  being  common  carriers,  the  legisla 
ture  can,  by  statute,  restrict  the  capital  stock  to  the  amount 
invested.  If  this  course  had  been  adopted  years  ago  many  of 
the  abuses  now  endured  by  the  people  would  have  been  pre 
vented.  Not  only  has  the  law-making  power  the  right  to  re 
strict  the  stock  to  the  actual  cost  of  the  road,  but  it  has  also 
the  power  to  fix  the  maximum  rates  for  transportation.  Com 
petition  will  always  have  a  controlling  influence  upon  the  price 
of  any  commodity,  as  well  as  fixing  the  price  of  any  species  of 
services  or  labor.  The  legislature  has  the  power  to  enact  stat 
utes  to  prohibit  the  consolidation  of  the  business  of  railroad 


304  MONOPOLIES    AND   THE    PEOPLE. 

companies,  or  a  combination  on  their  part  to  charge  excessive 
tariffs ;  and  the  courts  possess  the  power  to  enforce  the  ob 
servance  of  such  statutes  by  the  infliction  of  suitable  penalties. 
In  this  connection  the  abuses  practiced  by  the  dispatch  com 
panies  may  be  considered.  The  railroad  companies  receive 
their  charters  with  the  understanding  and  implied  agreement 
on  their  part  that,  as  common  carriers,  they  will  deal  honestly 
with  the  public,  and  that  they  will  furnish  the  necessary  loco 
motives,  cars,  etc.,  for  the  purpose  of  supplying  the  ordinary 
wants  of  the  people.  This  they  are  bound  to  furnish,  and  also 
to  do  the  ordinary  carrying  of  freights,  for  a  reasonable  com 
pensation. 

We  have  already  given  a  history  of  the  dispatch  lines,  and 
told  who  compose  the  companies,  and  how  they  do  the  busi 
ness  the  railroad  companies  agreed  to  transact  when  they 
obtained  their  charters.  These  dispatch  lines  are  a  fraud  upon 
the  public,  for  which  the  companies  should  be  held  responsi 
ble.  Every  dollar  paid  to  them,  in  excess  of  the  regular  rates 
of  the  railroad  companies'  regular  tariff,  can  be  recovered  from 
the  companies.  The  fiction  of  hiring  their  roads  and  locomo 
tives  to  another  company,  and  giving  such  company  a  monop 
oly  of  the  trade  over  their  road,  in  order  that  higher  rates  may 
be  charged,  is  an  abuse  that  the  legislature  can  correct  and  the 
courts  can  punish.  Of  the  same  nature  are  the  "  warehouse  " 
and  "elevator"  combinations.  Of  these  we  know  what  is 
open  and  visible ;  but  of  the  internal  workings  and  divisions 
of  the  "  pools,"  or,  more  properly  speaking,  the  "  spoils,"  we 
know  but  little.  We  know  that  it  is  a  means  of  oppression, 
and  that  it  compels  farmers  to  sell  to  inside  men,  or  sacrifice 
the  moiety  of  the  crop  the  railroad  companies  allow  them  to 
retain.  In  law,  railroad  companies  are  bound  to  ship  for  all 
who  pay  the  regular  rates  without  bestowing  a  bounty  upon 
elevator  and  warehouse  men  ;  and  they  are  also  bound  to  de 
liver  the  freight  at  such  warehouses  as  the  shippers  direct. 
For  a  refusal  to  do  so,  they  are  liable  to  the  shipper  for  dam 
ages  to  the  amount  of  the  loss  suffered,  and  sums  extorted. 
Shippers  can  compel  the  companies  to  receive  their  freights 
on  board  their  cars  at  regular  stations,  and  to  deliver  their 
freights  at  the  place  designated,  irrespective  of  any  and  all 


CONCLUSION.  305 

combinations  to  prevent  it.  To  conclude  this  whole  matter, 
the  people  have  the  power  to  reform  all  the  abuses  they  suffer 
at  the  hands  of  these  monopolies  by  the  election  of  men  to 
legislative  offices  whose  hands  will  not  touch  bribes,  and  by 
filling  the  seats  of  justice  with  judges  who  are  not  so  wedded 
to  ancient  precedents  as  to  do  injustice  rather  than  make  a 
new  departure ;  by  men  whose  chief  object  shall  be  to  do  equal 
and  exact  justice  to  all,  and  not  resort  to  judicial  legislation 
and  new  interpretations  of  the  constitution  in  order  to  uphold 
and  strengthen  the  power  and  advance  the  interests  of  corpo 
rations  already  too  powerful  in  the  land. 

In  order  to  restore  to  the  people  the  rights  now  denied  them, 
and  to  abridge  the  combined  power  of  the  monopolies  who  now 
rule  the  country,  the  control  of  the  finances  must  be  taken 
from  them.  The  financial  policy  of  the  government,  adopted 
during  the  late  civil  war  as  a  war  measure,  is  still  adhered  to. 
The  internal  commerce  of  the  whole  country  is  controlled  by  a 
few  men — the  same  who  own  and  operate  the  railroads  and  rule 
the  business  in  "  Wall  street."  The  peculiar  financial  policy  of 
the  government  tends  to  concentrate  the  money  of  the  country 
— to  gather  it  together,  rather  than  to  scatter  it  abroad.  Xew 
York  City  being  the  great  commercial  center,  and  the  inter 
nal  commerce  of  the  country  being  under  the  control  of  a  few 
men  who  make  this  metropolis  their  principal  place  of  busi 
ness,  with  their  vast  lines  of  railroads  extending  over  the 
whole  country,  bringing  to  them  a  never-ceasing  stream  of 
money,  they  are  able  to  regulate  the  market  value  of  almost 
all  articles  of  commerce,  and  to  limit  the  supply  of  the  circulat 
ing  medium  as  occasion  serves.  We  have  already  shown  the 
bad  results  of  the  system  upon  the  interests  of  the  people,  and 
do  not  intend  to  repeat  it  here.  Ordinarily,  the  laws  of  trade, 
of  demand  and  supply,  will  regulate  and  equalize  the  distribu 
tion  of  the  circulating  medium  over  the  country.  Such  will 
always  be  the  case  if  no  special  causes  exist  to  prevent  it.  But 
with  the  railroad  interest  of  the  country  controlled  by  the 
same  combination  of  men  who  "corner"  all  the  coin  in  the 
country ;  with  the  established  policy  of  the  government  making 
depreciated  paper  the  only  circulating  medium,  and  the  "  legal 
tender  "  decision  making  this  depreciated  currency  the  stand- 
38 


306  MONOPOLIES    AND    THE    PEOPLE. 

ard  of  values ;  with  the  constant  fluctuation  of  prices  resulting 
from  the  above  named  causes  —  it  is  not  strange  that  these 
corporations  and  Wall  street  brokers  control  the  finances  of 
the  country.  Until  this  control  is  taken  from  them,  the  wrongs 
of  the  people  cannot  be  redressed. 

Money  is  said  to  be  "  power,"  and  when  a  certain  interest 
or  locality  has  the  absolute  control  of  this  "  power,"  all  others 
must  suffer.  One  means  of  stripping  railroad  magnates  and 
Wall  street  gamblers  of  this  power  would  be  the  resumption 
of"  specie  payment."  As  we  have  shown,  under  the  present 
financial  and  tariff  policy  of  the  country,  this  is  out  of  the  ques 
tion.  With  our  legal  tender  decisions,  our  depreciated  cur 
rency,  and  our  tariff  system,  the  balance  of  trade  is  largely 
against  us ;  our  coin  is  being  shipped  to  other  countries,  not 
leaving  us  sufficient  for  the  purposes  of  resumption,  or  for  cir 
culation.  Add  to  this  the  fact  that  the  Wall  street  brokers 
own  or  control  most  of  what  is  in  the  country,  and  the  truth  is 
patent  that  resumption  cannot  be  effected  until  the  whole 
financial  policy  of  the  government  is  remodeled.  Will  an 
increase  of  the  banking  facilities  of  the  country  under  the 
present  system  accomplish  this  object?  We  answer,  ISTo.  An 
increase  of  banks,  and  of  the  currency,  would  only  afford  tem 
porary  relief.  Suppose  $100,000,000  should  be  added  to  the 
present  amount  of  currency,  and  that  it  should  all  be  distribu 
ted  in  the  west  and  south.  Wall  street  operators  would  only 
have  to  increase  their  operations  to  gather  the  whole  of  it 
under  their  control.  They  now,  in  their  various  ramifications, 
own  and  control  capital  more  than  sufficient  to  pay  the  whole 
of  the  national  debt  and  leave  them  a  large  surplus.  While 
the  distribution  of  additional  currency  through  the  country 
might  afford  them  temporary  relief,  under  the  combined  man 
agement  of  railroad  corporations  and  Wall  street  brokers,  and 
without  any  change  in  their  present  system,  they  could  and 
would  soon  absorb  this  surplus  of  currency,  and  resume  the 
absolute  control  of  the  finances  of  the  country.  The  people 
would  again  be  in  their  power,  with  an  additional  burden  im 
posed  upon  them,  "  to-wit "  —  the  payment  of  the  interest  on 
an  additional  $100,000,000  of  government  bonds.  Would  a 
change  in  the  banking  system  of  the  country  take  from  these 


CONCLUSION.  307 

monopolists  the  control  of  the  finances  of  the  country  ?  This 
would  depend  upon  the  character  of  the  change.  If  the  secre 
tary  of  the  treasury,  or  his  department,  should  retain  the  entire 
management  of  the  system,  no  real  relief  could  he  expected. 
While  the  general  government  has  the  exclusive  right  to  reg 
ulate  the  coinage  and  value  of  coin  (money),  it  is  the  assump 
tion  of  power  not  delegated  to  vest  in  one  man,  or  department, 
the  exclusive  management  of  the  finances  of  the  entire  coun 
try,  not  only  of  the  government,  but  of  all  private  persons. 
We  do  not  comprehend  the  wisdom  of  fixing  and  limiting  the 
amount  of  currency  the  country  may  have  for  a  circulating 
medium,  and  empowering  one  man  to  decide,  how,  when,  and 
where  it  shall  he  distributed.  Conceding  to  the  general  gov 
ernment  the  power  to  charter  banks  and  issue  treasury  notes, 
the  power  is  not  exclusive.  There  is  no  limit  to  the  volume 
of  gold  and  silver,  and  if  government  should  attempt  to  limit 
the  amount  of  coin,  it  could  not  do  it.  The  laws  of  trade,  the 
demand  and  supply,  would  fix  the  amount  Under  our  pres 
ent  banking  system,  coin  is  driven  from  circulation,  and  a 
definitely  fixed  amount  of  treasury  notes  and  government 
paper  is  all  that  the  country  is  permitted  to  have  for  the  trans 
action  of  its  whole  business  —  and  this  amount  must  be  placed 
just  where  the  comptroller  of  the  currency  shall  determine. 

The  legal  tender  decisions  have  made  the  resumption  of 
specie  payment  impossible.  The  present  banking  system  pre 
vents  an  increase  of  currency  or  treasury  notes,  and  gives  con 
centrated  capital  absolute  and  unlimited  control  of  the  business 
of  the  country.  Any  other  banking  system,  if  left  under  the 
same  control,  would  be  subject  to  the  same  objections.  JSTo 
one  department  of  the  government,  nor  the  whole  government 
combined,  can  determine  the  amount  of  currency  necessary 
for  transacting  the  business  of  the  country.  Fixing  the 
amount  in  the  present  banking  act  has  afforded  the  means  to 
Wall  street  operators  for  "  cornering  "  such  amounts  of  cur 
rency  as  would  derange  the  market  and  depress  prices.  No 
valid  objection  can  be  offered  to  \vhat  is  known  as  the  "  free 
banking  system."  Such  a  system,  if  generally  adopted,  would 
strip  railroad  corporations,  Wall  street  jobbers,  and  all  other 
rings  and  combinations  of  men,  of  the  power  to  control  the 


308  MONOPOLIES    AND    THE    PEOPLE. 

finances  of  the  country.  Another  advantage  would  result  to 
the  people  :  It  would  free  them  from  the  annual  payment  of  from 
$18,000,000  to  $20,000,000  interest  on  government  bonds  pur 
chased  by  bankers  and  deposited  with  the  treasury  department. 
Such  a  system  ot  banking  would  reduce  the  margin  between 
coin  and  currency  and  promote  the  resumption  of  specie  pay 
ment,  and,  instead  of  having  only  depreciated  paper  as  a  cir 
culating  medium,  we  would  have  a  currency  convertible  into 
coin.  The  giant  corporations  and  other  monopolies  that  now 
rule  would  be  shorn  of  much  of  their  strength,  and  the  people 
would  be  freed  from  their  relentless  grasp. 

SEVENTH. — Free  Trade  and  Direct  Taxation.-^-Our  conclusion 
would  not  be  complete  were  we  to  omit  a  reference  to  the 
subject  of  tariff.  Indeed,  it  so  interlaces  the  question  of  trans 
portation  and  the  construction  of  railroads  as  to  become  an 
integral  part  of  our  discussion.  Disclaiming  any  partisan 
views  of  the  question,  we  shall  try  to  demonstrate  that  all  tar 
iffs  are  unjust  and  oppressive.  In  a  former  chapter  we  have 
shown  the-  operations  of  our  tariff,  and  some  of  its  results. 
We  now  proceed  to  demonstrate  that  the  true  rule  in  all  our 
dealings  and  commercial  transactions  is,  to  sell  where  we  can  ob 
tain  the  best  prices,  and  to  purchase  where  we  can  obtain  the  desired 
article  for  the  least  money.  Demand  and  supply  should  regulate 
the  prices  in  our  dealings,  and  protective  tariffs  should  be  re 
pealed.  A  "  protection  "  that  taxes  three-fourths  or  four  fifths 
of  the  whole  people,  in  order  that  the  remaining  fraction  may 
amass  riches,  is  an  oppression  that  ought  not  to  be  tolerated. 
No  class  is  more  oppressed  by  protective  tariffs  than  the  farm 
ers  and  producers  of  the  country.  The}T  do  not  ask,  nor  do 
they  receive  any  protection. 

With  high  or  protective  tariffs,  farmers  and  producers  pay 
much  more  than  their  just  proportion  to  the  support  of  the 
government.  The  consumer  simply  pays  tariff  duties  on  what 
he  consumes,  while  the  producer  not  only  pays  on  what  he 
consumes,  but  his  product  must  pay  a  large  part  of  the  duty 
upon  what  is  consumed  by  others.  The  products  of  the  coun 
try  are  its  wealth.  £To  matter  who  is  obliged  to  pay  the  duty 
in  the  first  instance,  ultimately  the  producer  must  pay  it.  To 


CONCLUSION.  309 

illustrate  this  proposition,  let  us  take  any  given  article  pro 
duced,  manufactured,  or  constructed  in  the  United  States. 
There  is  a  duty  on  some  of  the  material  used  in  the  manufac 
ture  of  the  reaper.  The  manufacturer  pays  this  duty,  and 
adds  it  to  the  cost  of  the  machine  purchased  by  the  farmer. 
In  the  erection  of  factories,  machine  shops,  furnaces,  and 
foundries,  dutiable  articles  are  used,  all  of  which,  in  the  end, 
must  be  paid  for  from  the  products  of  the  country.  In  the  con 
struction  of  railroads,  locomotives,  cars,  etc.,  iron  and  other 
articles  are  used  upon  which  there  are  high  tariff  rates. 
These  duties  are  paid  by  the  companies  in  the  first  instance, 
the  amounts  paid  are  included  in  the  cost  of  the  roads,  and 
must  be  returned  in  shape  of  increased  rates  for  transporta 
tion  over  the  roads.  In  the  end  these  duties  are  paid  by  the 
producer.  Every  bushel  of  wheat,  corn,  or  other  grain, 
shipped  over  a  railroad,  pays  part.  Protective  tariffs  are  so 
interwoven  with  the  construction  of  railroads  and  the  internal 
commerce  of  the  country  that  they  cannot  be  separated  from 
the  questions  we  have  been  discussing.  All  tariff  duties  are 
direct  charges  upon  the  productions  of  this  country,  and  not 
on  any  other.  Import  duties  are  not  paid  by  the  people  of 
the  country  from  whence  the  goods  are  imported,  but  by  our 
own  people.  It  matters  not  who  pays  the  tax  in  the  first  in 
stance,  in  the  end  it  must  be  paid  from  the  product  of  the 
country.  The  main  product  of  our  country,  especially  of  the 
west  and  south,  being  from  the  soil,  it  follows  that  the  farmer 
must  pay  by  far  the  greatest  portion  of  tariff  duties.  The 
burdens  imposed  on  him  are  more  than  his  just  share.  In  the 
first  place  he  pays  directly  the  duty  charged  upon  what  he  con 
sumes,  and  then  pays,  indirectly,  much  the  larger  part  of  the 
duties  paid  in  the  first  instance  by  others.  He  is  charged  with 
the  cost  of  shipping  his  grain  to  market,  whether  that  market 
is  in  the  United  States  or  Europe,  and  his  product. must  pay 
the  cost  of  shipping  the  return  cargo  from  Europe  to  America, 
with  the  addition  of  such  protective  duty  as  congress  may  fix 
by  statute.  His  product  must  bear  the  whole  burden.  "  In 
other  words,  the  question  of  transportion  is  part  and  parcel  of 
the  tariff  question,  and  cannot  be  dealt  with  apart  from  it. 
Transportation  is  made  dear  by  the  dearness  of  supplies ;  that 


310  MONOPOLIES   AND   THE   PEOPLE. 

is  to  say,  the  railroads  are  taxed  enormously,  and,  through  the 
railroads,  the  farmers,  for  the  benefit  of  special  industries. 
There  can  be  no  cheap  transportation  without  cheap  iron,  cheap 
cars,  cheap  stations;  and,  what  is  more,  there  can  be  no  mar 
ket  for  American  produce 'abroad  so  long  as  the  sale  of  all  for 
eign  commodities,  except  gold,  is  made  as  difficult  as  high 
duties  and  vexatious  custom  house  regulations  can  make  it- 
Agricultural  produce  at  the  west  is  now  a  glut;  it  must  be 
come  more  and  more  of  a  glut,  if  either  more  railroads  are 
opened  or  the  cost  of  transportion  on  the  present  roads  is  di 
minished,  as  long  as  new  markets  are  not  provided,  or,  in 
other  words,  as  long  as  access  to  the  crowded  regions  of  the 
Old  World  is  artificially  impeded.  Of  course,  there  may 
come  a  time  when  there  will  be  population  enough  in  the  west 
to  eat  up  all  its  corn  and  pork ;  but,  at  the  present  rate  of 
agricultural  and  railroad  development,  this  will  not  be  wit 
nessed  by  either  the  present  generation  or  the  next,  and  the 
cry  of  the  '  Granges'  ought  to  be  for  a  clearing  of  the  outlets 
to  the  Old  World  in  all  ways.  To  secure  this,  it  is  not  enough 
to  cheapen  transportation ;  we'  have  to  offer  a  market  to  the 
foreigner  for  his  commodities  in  order  to  get  him  to  take 
ours." 

As  we  have  before  remarked,  the  settled  plan  for  raising 
revenue  for  the  support  of  the  general  government,  is  by  im 
port  duties.  By  common  consent  this  plan  has  been  accepted  as 
the  most  feasible.  While  we  have  been  following  this  method 
from  the  organization  of  our  government,  by  legislation  we 
have  been  making  war  upon  foreign  commerce,  by  imposing 
tariffs  for  the  protection  and  government  of  domestic  manufac 
tures.  By  congressional  enactment,  we  determine  that  we 
will  support  the  government  by  the  collection  of  duties  levied 
upon  foreign  imports ;  and  then  we  levy  high  rates  of  duties 
for  the  purpose  of  prohibiting  these  foreign  imports,  and  for 
building  up  and  protecting  home  manufactures.  Under  the 
present  tariff,  but  for  the  fact  that  our  own  manufacturers  take 
advantage  of  the  high  rate  of  duties,  and  advance  the  price  of 
their  own  products,  to  the  extent  of  the  duty,  foreign  importa 
tions  would  cease,  and  some  other  means  would  have  to  be 
adopted  to  supply  the  revenue  needed  by  the  government. 


CONCLUSION.  311 

The  only  benefit  thus   far  resulting   from  our  present  high 
tariff  is  the  enriching  of  a  few  men  by  the  imposition  of  un 
just  and  unequal  burdens  upon  the  farming  and  producing 
classes.     It  might  be  pertinent  to  inquire  whether  there  is 
any  justice  in  any  kind  of  tariff.     All  are  bound  to  contribute 
their  pro  rata  share  for  the  support  of  the  government.      In 
theory  the  .property  of  the  country  is  taxed  for  this  purpose. 
Such  a  system  of  taxation  is  just  and  equitable,  because  it  is 
uniform ;    the  property  of  each  individual    pays  its  pro  rata 
share,  and  the  burden  is  equally  divided.     As  we  have  already 
shown,  revenue  derived  from  tariffs  is  a  tax  upon  the  labor  of 
the  citizen,  and  not  on  the  wealth  or  property  of  the  country. 
The  poor  man,  the  man  who  depends  entirely  upon  his  daily 
labor  for  the  support  of  himself  and   family,  pays   as   much 
for  the  support  of  the  government  as  the  man  cf  immense 
wealth.     His  daily  toil,  considered  in  the  light  of  its  value 
to  the  government,  is  taken  as  equivalent  to  the  $500,000  of 
the  rich  man.     The  industry  and  not  the  wealth  of  the  coun 
try  is  made  to  support  the  government  when  the  revenue  is 
derived  from  import  duties.     No  one  will  deny  the  right  of 
the  general  government  to  provide  for  its  own  support,  nor  its 
right  to  provide  means  to  this  end  by  the  levy  of  import  du 
ties;  yet  the  wisdom  of  these  duties  does  not  so  clearly  ap 
pear.     The  reader  will  have  noticed  that  this  method  of  raising 
revenue  operates  unequally;  that  it  gives  to  American  manu 
facturers  an  absolute  monopoly  of  business;    that  the  only 
reason  why  imports  do    not  cease  is  because  the  prices  of 
American  fabrics  have  been  arbitrarily  raised  to  the  highest 
point  allowable  without  permitting  the  importer  to  undersell 
the  home-made  article.     The  manufacturers,  under  the  statute, 
having  a  complete  monopoly,  are  not  slow  in  availing  them 
selves  of  it,  and,  as  a  natural  result,  the  whole  country  is  com 
pelled  to  contribute  to  their  support.     It  may  be  asked  :  How 
would  you  provide  for  the  support  of  the  government?     We 
answer,  by  direct  taxation,  because  this  is  a  just  and  equitable 
manner  of  raising  revenue,  compelling  the  wealth  and  prop 
erty  of  the  country,  and  not  the  labor  of  the  toiling  millions, 
to  support  the  government.     Because  it  will  prove  less  ex 
pensive,  and  will   do  away  with   custom  houses  and  custom 


512  MONOPOLIES   AND   THE    PEOPLE. 

house  officers,  with  the  frauds,  swindling,  and  robbery,  that 
now  afflict  the  country.  Because  it  will  open  to  us  the  markets 
of  the  world,  and  give  us  an  outlet  and  market  for  our  agri 
cultural  products.  Now  the  balance  of  trade  is  against  us ;  our 
country  is  being  drained  of  its  coin  and  its  wealth ;  all  produc 
tive  industries  languish,  because  of  our  selfish  policy  of  at 
tempting  to  become  exclusive  in  our  commerce. 

We  are  content  to  trammel  all  dealings  with  foreign  nations 
in  the  way  of  barter,  sale,  and  exchange,  and  send  our  coin  to 
Europe,  while  we  use,  as  the  representative  of  money,  an  irre 
deemable  paper  currency.  Free  trade  would  enable  us  to  in 
crease  our  commerce  and  shipping  on  the  ocean ;  to  arrest  the 
stream  of  coin  that  is  flowing  from  us  to  Europe ;  to  sell  where 
we  could  obtain  the  best  prices,  and  buy  where  we  could  make 
the  best  bargains.  We  are  in  favor  of  direct  taxation  for  the 
support  of  the  government,  because  it  will  simplify  our  reve 
nue  system,  and  consequently  require  less  revenue  than  is  now 
needed.  It  will  compel  more  rigid  economy  in  the  adminis 
tration  of  the  government,  and  place  within  the  reach  of  the 
people  the  means  of  ascertaining  how  much  is  annually  expend 
ed  by  those  in  power.  It  will  destroy  one  branch  of  the  sys 
tem  of  monopolies  that  is  robbing  the  agricultural  and  produc 
ing  classes  of  their  substance.  Let  us  not  become  alarmed  at 
the  thought  of  this  direct  taxation.  We  accept  it  as  the  best 
method  for  raising  revenue  for  the  support  of  state  and  muni 
cipal  government,  and  no  good  reason  can  be  shown  why  the 
same  method  would  not  be  best  for  the  general  government. 
The  amount  to  be  paid  by  the  men  of  wealth  would  be  in  ex 
cess  of  what  they  now  pay,  because  their  property,  and  not 
what  they  consume,  would  be  the  basis  of  taxation.  But  to 
the  laborer  with  a  family,  the  machanic,  the  farmer  with  small 
means,  and  to  a  majority  of  men  who  now  pay  in  shape  of  du 
ties  from  $100  to  $200  annually,  the  amount  required  would 
be  but  a  tithe  of  the  sum  now  demanded.  To  learn  something 
of  the  rate  per  cent  necessary  to  support  the  government,  let 
us  look  at  the  valuation  of  the  property  in  the  United  States 
as  returned  with  the  census  in  1870.  The  actual  amount  as 
returned  was  $14,178,486,732,  call  it  in  round  numbers  $15,- 
000,000,000 ;  a  tax  of  one  per  cent  on  this  amount  would  pro- 


CONCLUSION.  813 

duce  a  revenue  of  $150,000,000.  The  above  valuation  is  taken 
mainly  from  the  returns  made  by  assessors,  and  is  but  little 
more  than  one-third  of  the  real  value.  Let  us  double  the 
amount,  then  the  value  of  the  property  in  the  United  States 
will  be  $30,000,000,000.  By  an  examination  of  the  returns  it 
will  be  seen  that  but  little  railroad  property  is  included  in  the 
valuation,  If  this  property  is  added,  the  above  amount  will 
be  largely  increased.  By  supposing  the  real  value  of  the  as 
sessable  property  to  be  $30,000,000,000;  then  a  tax  of  one- 
half  per  cent  would  raise  a  revenue  of  $150,000,000,  a  sum 
sufficient  to  pay  all  the  necessary  current  expenses  of  the  gov 
ernment  and  leave  something  to  apply  on  the  national  debt. 
A  tax  of  three-fourths  per  cent  would  raise  a  revenue  of  $225,- 
000,000,  enough  to  support  the  government  and  pay  the  inter 
est  on  the  whole  of  the  national  debt.  Should  the  special  tax 
be  continued  on  spirits  and  tobacco,  then  a  tax  of  four  mills 
would  raise  a  sufficient  revenue  for  all  legitimate  governmen 
tal  purposes.  Now,  a  laboring  man  must  pay  from  the  pro 
ceeds  of  his  labor  from  thirty  per  cent  upwards  for  almost  all 
his  purchases  of  clothing  for  his  family,  and  the  same  on  many 
other  articles  of  consumption.  If,  in  the  course  of  a  year,  he 
purchases  to  the  amount  of  $150,  of  this  sum,  $50  is  paid,  in 
directly,  it  is  true,  but  nevertheless  it  is  paid,  and  is  a  tax. 
With  direct  taxation,  if  his  homestead  should  be  worth  $1,000, 
instead  of  paying  $50  as  he  now  does,  he  would  pay  five  for 
the  support  of  the  government,  and  the  other  forty-five  dollars 
now  paid  by  him  from  the  proceeds  of  his  labor  would  be 
charged  against  the  property  of  his  rich  neighbor.  There  is 
no  injustice  in  this  method  of  raising  revenue  for  the  support 
of  the  government,  and  its  adoption  would  relieve  the  people 
from  the  oppressions  of  a  ring  of  wealthy  monopolies  who  now 
control  the  entire  manufacturing  industries  of  the  country, 
and  would  allow  the  laws  of  trade,  of  demand  and  supply,  to 
fix  the  prices  of  manufactured  articles.  No  reason  now  exists 
for  the  continuance  of  a  law  that  assures  to  the  manufacturer 
large  dividends  on  his  investments,  while  the  farm  products 
must  be  sold  and  bartered  for  a  nominal  price.  The  producer 
asks  no  protection  save  access  to  the  market  and  the  privilege 
of  keeping  for  his  family  and  himself  the  net  proceeds  of  his 
39 


314  MONOPOLIES  AND  THE  PEOPLE. 

crops,  without  being  compelled  to  bestow  one-third  of  it  as  a 
gratuity  upon  the  already  rich  and  lordly  manufacturer.  This 
right  the  agriculturalists  will  never  enjoy  until  the  old  anti- 
republican  theory  of  protective  and  revenue  tariffs  is  exploded, 
and  the  equal  rights  of  all  are  vindicated.  When  this  tariff 
embargo  on  commerce  is  removed,  when  this  blockade  is 
raised,  arid  the  producer  can  send  his  grain  to  Europe,  and  in 
return  receive  such  manufactured  articles  as  he  needs,  without 
paying  royalty  to  some  American  lord,  in  shape  of  tariffs  (iron 
ically  called  "protection  ")  the  producing  classes  will  ask  no 
other  aid  of  government.  Then  will  appear  the  dawn  of  that 
universal  brotherhood  of  man,  which  sooner  or -later  will  illu 
minate  the  wrhole  civilized  world.  With  "free  trade"  and  di 
rect  taxation,  a  death  blow  will  be  given  to  monopolists,  and 
the  burdens  so  long  borne  by  the  laboring  and  producing 
classes  will  be  lifted  from  them,  and  they  will  be  permitted  to 
enjoy  the  fruit  of  their  own  labor. 

EIGHTH. — Patent  Rights  —  Cash  Payments  Recommended  in  Place 
of  Long  Standing  Mortgages  on  the  Genius  of  American  Industry. — 
We  have  shown  some  of  the  abuses  connected  with  the  patent 
system  of  the  country,  and  their  effect  upon  the  people.  While 
the  monopoly  of  inventions  is  not  of  as  great  magnitude  as 
some  others  of  which  we  have  treated,  the  oppressions  result 
ing  from  it  are  more  annoying  than  many  that  engage  general 
attention.  Inventions  are  patented  because  they  are  expected 
to  be  of  public  benefit,  and  because  it  is  but  just  that  the  in 
ventor  should  be  rewarded  for  a  discovery  or  invention  that 
will  advantage  the  public  generally,  or  individuals  who  may 
make  use  of  the  invention  or  discovery.  The  monopoly  given 
to  the  inventor,  or  discoverer,  is  to  enable  him  to  compensate 
himself  for  the  time,  labor,  and  skill,  as  well  as  the  talent  or 
genius  bestowed  upon  the  invention,  and  also  to  encourage 
others  to  enter  the  lists  as  inventors  or  discoverers  of  new  and 
useful  articles  and  principles.  But  our  patent  system  was 
never  designed  for  giving  a  monopoly  to  any  one  who  hap 
pened  to  shape  a  plow  handle  different  from  those  now  in  use, 
or  who  cut  a  thread  used  in  operating  a  sewing  machine  in  a 
peculiar  manner,  or  for  the  many  hundreds  of  trifling  altera- 


315 

tions  made  in  many  articles  in  general  use1,  or  in  the  manner 
of  using  them.  An  examination  of  the  list  of  patents  issued 
will  demonstrate  that  not  one  in  ten  contains  any  new  princi 
ple,  or  is  of  any  value  to  any  one,  save  the  patentee.  The 
apparent  ease  with  which  patents  are  obtained,  and  the  indis 
criminate  manner  of  their  issue,  is  a  great  and  growing  evil 
that  should  be  remedied.  No  patent  should  be  issued  until  a 
test  had  demonstrated  its  perfection  and  usefulness.  An  ex 
amination  of  many  articles  on  which  letters  patent  have  been 
issued,  coupled  with  the  attempt  to  use  them,  discloses  the  fact 
that  the  invention,  if  it  ever  could  be  of  any  particular  value, 
required  further  improvement  to  make  it  of  such  value,  and 
that  letters  patent  had  been  issued  for  an  undeveloped  theory. 
If  the  invention  had  been  submitted  to  a  practical  test,  this 
state  of  things  would  not  have  occurred,  and  the  public  would 
not  have  been  defrauded.  Patented  articles  enter  so  largely 
in  the  prosecution  of  all  industrial  pursuits  that  it  is  of  the  ut 
most  importance  that  they  should  be  perfect  in  their  plans  and 
construction,  and  that  the  government  should  assume  some 
kind  of  responsibility  in  all  cases  when  letters  patent  are  issued. 
Such  letters  say  in  substance,  that  the  patented  article  is  new 
and  useful,  and  that  it  is  reasonably  fit  for  the  work  in  the  view 
of  the  inventor.  These  letters  patent  are  a  letter  of  credit  to 
the  patentee ;  as  a  license  permitting  him  to  sell  his  invention, 
and  forbidding  all  persons  to  sell  or  use  the  invention  without 
his  consent.  Under  the  present  law  it  is  simply  a  special  fa 
vor,  in  shape  of  an  exclusive  right,  granted  to  an  individual 
to  defraud  the  persons  with  whom  he  deals.  The  law  should 
be  so  modified  as  to  make  the  government  or  the  examining 
officer  responsible  in  all  cases  when  patents  issued  for  pre 
tended  discoveries  or  inventions  prove  to  be  neither  new  nor 
useful.  If  such  were  now  the  law,  there  would  be  less  com 
plaint  of  frauds  practiced  by  pretended  inventors,  and  the  ut 
ter  failure  of  patented  articles  to  answer  the  purposes  for  which 
they  were  intended.  The  law  should  be  so  amended  as  to  pre 
vent  oppressions  and  extortions  in  the  sale  and  use  of  articles 
of  real  merit,  for  which  the  inventor  should  be  rewarded,  and 
should  have  an  exclusive  right  to  use  and  sell  his  invention. 
There  should  be  some  limit  to  the  price  of  the  article.  Gov- 


816  MONOPOLIES   AND   THE    PEOPLE. 

ernment  has  given  him  an  exclusive  right ;  he  should  be  re 
stricted  to  such  prices  as  would  fairly  compensate  him  for  his 
discovery.  His  case  is  not  like  that  of  other  men,  who  in 
their  dealings  come  in  competition,  and  where  this  competi 
tion  and  the  laws  of  demand  and  supply  fix  the  prices  of  the 
commodities  in  which  they  deal.  He  has  the  whole  business 
in  his  own  hands,  and  any  attempt  on  the  part  of  others  to  in 
terfere  with  his  exclusive  right  is  forbidden  and  punished.  We 
have  already  stated  that  machines  sold  in  this  country  for  $75 
could  be  bought  in  England  for  less  than  half  that  sum.  Most 
of  the  articles  and  machines  of  different  kinds  patented  in  this 
country,  and  used  in  Europe,  are  sold  by  the  patentees,  their 
agents  and  assigns,  at  less  than  half  the  sums  demanded  here 
at  home.  In  Europe,  where  they  have  no  monopoly,  no  ex 
clusive  right,  they  come  in  competition  with  others ;  hence 
they  sell  at  fair  prices.  But  in  this  country,  where  they  have 
an  exclusive  right,  they  extort  from  the  purchaser  from  one 
hundred  to  five  hundred  per  cent  on  the  cost  of  the  article. 
This,  government  should  prevent.  But  a  better  way  to  adjust 
the  whole  matter  between  the  public  and  the  inventor  would 
be  for  the  government  to  pay  a  premium  according  to  merit, 
for  all  new  and  useful  inventions,  and  remove  all  restrictions. 
Let  all  be  free  to  make,  use,  and  sell,  not  the  invention,  but 
the  thing  invented.  This  course  would  require  careful  and 
thorough  examination  and  experiment  before  the  principle  was 
indorsed  by  the  government,  and  the  premium  paid.  Or,  if 
his  invention  proved  to  be  new  and  useful,  let  government  pay 
to  the  inventor  such  sum  as  would  fairly  and  liberally  compen 
sate  him,  and  give  the  invention  to  the  public.  Government 
has  bestowed  immense  grants  of  land  upon  railroad  compa 
nies,  for  the  avowed  purpose  of  assisting  in  the  development  of 
the  country;  with  greater  justice  could  it  bestow  upon  the 
whole  people  all  useful  discoveries  and  inventions.  Such  a 
course,  adopted  and  executed  in  good  faith,  would  make  it  im 
possible  for  adventurers,  sharpers,  and  swindlers  to  impose 
worthless  inventions  and  pretended  discoveries  upon  the  gov 
ernment,  and  then  palm  them  off  upon  the  people.  Under  the 
present  system  of  obtaining  letters  patent,  the  people  are 
wronged  and  often  cheated,  and  for  their  wrongs  the  govern- 


CONCLUSION.  317 

ment  is  mainly  responsible.  Some  other  plan  should  be 
adopted,  which  in  its  operations  would  liberally  compensate 
the  inventor,  and  at  the  same  time  protect  the  people  from  ex 
tortions  practiced  by  the  owners  of  valuable  inventions,  and 
also  from  the  thousands  of  adventurers  who  have  been  so  fortu 
nate  as  to  obtain  letters  patent  upon  pretended  discoveries  of 
principles  neither  new  nor  useful,  using  their  letters  of  credit 
for  the  purpose  of  defrauding  the  public. 

CONCLUSION. — We  now  approach  the  end  of  our  labors.  We 
have  sought  to  present  to  the  reader  a  candid  statement  of  the 
different  questions  we  have  discussed  ;  to  lay  before  him^evi- 
dence  of  the  great  and  growing  power  of  the  men  who  are 
surely  and  swiftly  getting  control  of  the  departments  of  the 
government,  and  monopolizing  the  finances  and  commerce  of 
the  whole  country.  In  doing  this  we  have  endeavored  to  di 
rect  attention  to  the  exclusive  and  munificent  grants  made  to 
railroad  companies,  and  to  their  abuse  of  these  grants ;  to  the 
means  used  by  them  to  get  control  of  the  legislative  and  judi 
cial  departments  of  the  government,  and  their  apparent  success 
in  that  direction ;  to  the  abridgment  of  the  rights  of  the  peo 
ple  incident  thereto  ;  to  the  dishonest  and  fraudulent  practices 
of  the  men  constructing,  owning,  and  operating  railroads ;  to 
the  disgraceful  Credit  Mobilier  swindle,  and  its  influence  upon 
the  country ;  to  the  questionable  position  of  some  of  the  men 
representing  the  people  in  congress  ;  to  the  destruction  of  the 
rights  of  the  states  and  of  the  people ;  to  the  disregard  of  the 
constitutional  restrictions  and  safeguards  when  the  interests  of 
these  corporations  were  to  be  subserved;  the  purposes  for 
which  taxes  should  be  levied ;  to  the  nature  of  railroad  corpo 
rations —  that  they  are  private  in  their  organization,  and  sub 
ject  to  the  control  of  the  people ;  to  the  effect  of  the  policy  of 
affording  local  aid  to  railroad  companies  by  taxation,  etc.;  to 
the  blighting  influence  attending  municipal  subscriptions  to 
railroad  companies;  to  the  impositions  practiced  in  transport 
ing  freights,  and  the  warehouse  and  elevator  abuses ;  to  the 
fraudulent  increase  of  capital  stock  by  railroad  companies 
through  the  watering  process,  and  the  extortions  necessary  to 
this  dishonest  practice ;  to  their  relative  immunity  from  the 


818  MONOPOLIES  AfrD  THE  PEOPLED 

burdens  imposed  for  the  support  of  government ;  to  the  strong 
grasp  of  consolidated  capital  upon  the  legislation  of  the  coun 
try  ;  to  the  special  privileges  granted  to  corporations  by  state 
legislatures ;  to  the  influence  of  these  corporations  on  the  ex 
ecutive  department  of  the  government ;  to  the  absolute  con 
trol  of  the  treasury  and  the  finances  enjoyed  by  corporations 
and  Wall  street  brokers,  with  the  manner  of  doing  business  in 
Wall  street ;  to  the  influence  of  corporations  in  the  selection 
of  judges  of  the  supreme  court,  with  the  decisions  following 
the  reconstruction  of  that  court ;  to  the  banking  and  financial 
policy  of  the  government,  and  its  bad  results ;  to  the  tariff 
policy  and  its  effect  upon  the  agricultural  and  producing  classes; 
to  the  patent  system  and  its  abuses;  and  finally  to  the  fact  dem 
onstrated,  that  unless  the  many  abuses  that  have  obtained  in 
the  land  can  be  corrected,  the  people  will  be  justified  in  call 
ing  into  action  their  inherent  rights  for  regaining  those  priv 
ileges  refused  to  them,  but  conferred  upon  the  corporations, 
rings,  and  combinations  which  have  obtained  such  great  power 
in  the  government.  We  do  not  claim  that  our  work  is  free 
from  errors.  We  have  sought  to  state  the  facts  correctly.  If 
they  are  inaccurate,  the  errors  are  unintentional.  It  was  not 
with  the  wish  or  intention  of  doing  injustice  to  any  man,  class 
of  men,  corporations,  or  officers  of  the  goverment,  that  we 
undertook  this  work;  but  with  the  firm  belief  and  strong  con 
viction  that  the  liberties  of  the  people  were  being  taken  from 
them,  while  a  gigantic  oligarchy  was  obtaining  control  of  the 
government.  We  believe  the  remedy  is  yet  with  the  people ; 
but  to  save  themselves  prompt,  speedy,  and  united  action  is 
imperative.  We  have  watched  with  increasing  interest  the 
growing  power  of  corporations,  for  years,  hoping  that  the  time 
would  come  when  the  people  would  awake  to  the  necessity  of 
asserting  their  latent  powers  for  the  restoration  of  their  rights. 
The  civil  war  and  other  great  political  questions  have  engaged 
the  public  attention,  while  selfish  and  ambitious  men  have  com 
bined  and  consolidated  their  wealth  and  corporate  power  for 
the  purpose  of  controlling  the  government  and  commerce  of 
the  country.  Their  success  has  been  such  as  to  alarm  the  ag 
ricultural,  the  producing,  and  laboring  classes.  The  indica 
tions  now  are  that  active  and  aggressive  war  will  be  waged 


CONCLUSION.  319 

against  these  oppressors  of  the  people  until  they  are  shorn  of 
their  great  power  and  the  rights  of  the  people  are  restored. 
Desiring  to  aid  in  this  great  reform,  we  have  deemed  the  pres 
ent  a  favorable  time  to  present  this  work  to  the  public.  While 
the  combination  the  people  are  now  combatting  is  powerful  — 
possessing  a  dangerous  influence  over  the  legislative  and  judi 
cial  branches  of  the  government,  well  organized  and  vigor 
ous,  controlling  the  finances  of  the  country  and  holding  our 
commerce  in  its  grasp  —  strong  in  wealth,  and  in  the  extent  of 
its  organization —notwithstanding  these  fearful  facts,  that  old 
republican  truth  still  obtains,  that  "the  people  are  the  source 
of  all  power."  That  power  is  now  being  aroused.  The  watch 
word  now  heard,  is  "Equal  and  exact  justice  to  all."  That 
potent,  though  silent  weapon,  the  ballot,  is  a  sure  correction 
of  all  abuses  when  intelligently  used.  The  signs  of  the  times 
are  hopeful  from  the  fact  that,  for  the  first  time  in  many  years, 
the  people,  especially  the  agricultural,  producing,  and  laboring 
classes  are  taking  the  lead.  They  are  reading,  thinking  and 
acting  independently  of  old  political  and  partisan  leaders;  they 
are  exercising  their  rights  as  freemen.  They  have  declared 
that  "  old  things  shall  be  done  away,  and  all  things  shall  be 
come  new;"  that  the  government  shall  be  taken  out  of  the  old 
political  grooves  in  which  it  has  been  running ;  that  it  shall 
assume  new  life,  with  the  rights  of  the  people  fully  recognized. 
That  when  the  rights  of  the  people  and  of  free  government  on 
the  one  hand,  and  the  privileges  claimed  by  the  combined  cor 
porate  interests  of  the  country  on  the  other,  are  at  issue,  these 
rights  shall  not  be  made  to  yield  to  old  precedents  originating 
in  monarchial  and  despotic  governments,  in  order  that  the 
privileges  claimed  by  corporations  may  be  upheld. 

The  organization  of  the  Patrons  of  Husbandry  forms  a  nu 
cleus  around  which  all  reformers  can  rally.  The  reforms  they 
seek  will  effect  the  liberation  of  the  whole  people  from  the  op 
pressions  under  which  they  now  suffer.  Our  aim  is  to  aid  in 
this  work.  We  feel  assured  that  there  is  an  irreconcilable 
conflict  between  the  monopolies  and  the  people;  that  the  pow 
ers  and  privileges  assured  to  corporations  are  at  war  with  re 
publican  institutions,  and  hostile  to  the  constitution  of  our 
country.  To  effect  reforms  will  require  time.  Some  relief 


320  MONOPOLIES   AND   THE    PEOPLE. 

can  be  speedily  obtained,  but  to  accomplish  thorough  reform, 
and  bring  the  administration  of  the  government  under  the  con 
trol  of  the  people,  will  require  that  the  offices  shall  be  filled 
by  men  whose  education  and  pursuits  have  been  such  as  to 
place  them  in  full  sympathy  with  the  people  —  men  who  will 
not  spend  their  time  as  legislators  and  judges  in  discussing 
federal  prerogatives,  and  classing  our  republican  government 
with  old  time  despotisms.  The  doctrine  that  corporations  are 
subject  to  legislative  control  must  be  fully  established  as  the 
fixed  and  settled  policy  of  our  government.  When  this  point 
is  reached,  the  farmer  will  not  be  obliged  to  divide  his  crops 
with  railroad  companies  —  and  so  with  all  other  abuses.  The 
power  to  correct  all  abuses  must  remain  with  the  people.  The 
prosperity  of  the  people,  the  perpetuity  of  our  form  of  govern 
ment,  the  rights  of  the  states  and  the  public  can  only  be  pre 
served  by  guarding  against  all  encroachments  made  upon  free 
institutions,  whether  they  originate  in  congress  or  out  of  it  — 
whether  they  are  enunciated  from  the  bench  of  the  supreme 
court,  or  from  the  stump.  In  these  da^s  when  the  tendency 
is  to  a  strong  centralized  government  —  when  a  few  men  con 
trol  the  finance  of  the  country  —  when  the  whole  commerce  of 
the  country  is  controlled  by  Wall  Street  gamblers  —  when 
special  grants  and  privileges  are  bestowed  upon  companies 
and  individuals,  arid  when  the  property  of  each  individual  is 
insecure  and  liable  to  be  assessed  for  the  building  of  railroads 
—  at  this  time,  there  came  from  Justice  Bradley  of  the  su 
preme  court  of  the  United  States,  these  ominous  words :  "  It 
is  absolutely  essential  to  the  independent  national  existence 
that  government  should  have  a  firm  hold  on  the  two  great  sov 
ereign  instruments  of  the  sword  and  the  purse."  This  an 
nouncement  is  made  from  the  bench  of  the  supreme  court  of 
the  United  States,  on  the  fifteenth  of  January,  1872,  The 
government  must  have  a  firm  hold  on  the  purse  and  sword. 
This  is  the  declaration  of  the  court  made  but  a  few  months 
before  it  decided  that  railroad  corporations  were  public,  and 
that  the  property  of  private  third  parties  of  the  whole  people 
could  be  taxed  to  build  them.  We  claim  that  under  our  form 
of  government  the  people  are  the  power  to  retain  the  control 
of  the  purse  and  sword;  that  to  place  them  together  in  the 


CONCLUSION.  321 

hands  of  those  persons  who  fill,  for  the  time  being,  the  gov 
ernment  offices,  is  to  take  from  the  governing  power  its  rights. 
But  when  the  people's  purse  and  the  government  finances  are 
subject  to  the  action  of  corporations  and  rings,  the  special  fa 
vorites  of  the  courts,  the  people  are  imperatively  called  upon 
to  arise  and  assert  their  rights  as  freemen  —  to  throw  off  this 
oppressive  yoke  —  to  stamp  with  the  seal  of  condemnation,  not 
only  the  enunciation .  of  such  anti-republican  sentiment,  but 
the  judge  who  uttered  it.  The  real  question  at  issue  between 
the  people  and  monopolies  fostered  and  protected  by  govern 
ment  is,  whether  the  people  shall  rule,  or  remain  the  servants 
and  vassals  of  the  monopolists.  The  final  determination  of 
this  question  will  decide  whether  we  are  to  live  under  the  re 
public  planned  and  formed  for  us  by  our  revolutionary  ances 
tors,  or  are  to  submit  to  the  oligarchy  shaped  for  us  by  recent 
enactments  and  decisions  in  favor  of  a  class  of  men,  who,  for 
the  sake  of  private  gain,  are  overturning  and  destroying  our 
free  institutions.  The  issue  is  fairly  presented ;  the  lines  dis 
tinctly  drawn.  The  corporate  hosts  are  marshaling  their 
forces;  the  people,  under  the  lead  of  the  tillers  of  the  soil,  are 
preparing  for  battle. 

When  the  Union  was  threatened  with  disruption,  and  the 
armies  were  about  to  engage  in  conflict,  they  armed  them 
selves  with  the  death  dealing- sword  and  gun.  Hundreds  of 
thousands  of  brave  and  patriotic  men  proved  their  devotion  to 
their  country  by  the  sacrifice  of  their  lives  for  its  preservation. 
No  such  sacrifices  are  now  demanded.  In  a  legal,  constitu 
tional  manner,  these  corporations,  rings,  and  combinations, 
can  be  routed  "horse,  foot,  and  dragoons;"  their  friends  "at 
court"  can  be  displaced;  their  paid  agents  and  attorneys  can 
be  driven  from  the  halls  of  congress  and  state  legislatures; 
their  judges  can  be  invited  to  vacate  their  seats  that  others, 
elected  by  the  votes  of  the  people,  may  fill  them ;  and  the 
standard  of  "  equal  rights  "  can  be  again  reared  aloft  without 
the  use  of  bullets  or  the  shedding  of  blood. 

But  after  all  these  errors  and  abuses   shall  have  been  cor 
rected,  other  questions  will  arise.     The  farmer  of  the  west  and 
south  must  have  cheap  transportation  to  the  seaboard.     It 
may  be  demonstrated  that  our  present  system  of  building  rail- 
40 


322  MONOPOLIES   AND    THE    PEOPLE. 

roads  will  not  answer  the  purpose  because  of  the  great  expense 
of  constructing  and  operating  them,  and  that  other  means 
must  be  adopted.  Under  the  constitution  the  general  govern 
ment  has  exclusive  maritime  jurisdiction,  and  can  make  canals 
and  slack  water  navigation.  History  demonstrates  that  water 
transportation  is  always  cheapest.  The  government  should 
provide  for  water'  transportation  from  the  great  agricultural 
centres  to  the  sea-board.  This  kind  of  improvement  the  gen 
eral  government  can  lawfully  make,  and  an  expenditure  of  a 
small  part  of  the  wealth  bestowed  upon  private  railroad  cor 
porations  would  open  up  water  channels,  affording  cheap 
transportation  from  the  west  to  the  east  and  south.  Grain 
and  meats  could  then  be  shipped  to  the  sea-board  at  such  rates 
as  would  warrant  their  transportation  to  foreign  markets, 
which,  with  the  abolition  of  protective  duties,  would  furnish 
the  farmer  a  good  sale  for  his  products,  and  an  opportunity 
of  purchasing  his  supplies  free  from  the  bounty  he  now  pays 
the  eastern  manufacturer.  With  such  means  for  shipping  the 
farm  products  of  the  west  and  south,  with  protective  tariffs  abol 
ished,  and  the  financial  policy  of  the  nation  so  changed  as  to 
furnish  to  the  people  the.  same  kind  of  money  used  by  the 
government,  with  "specie  payment"  resumed,  and  the  large 
margin  between  coin  and  paper  removed,  prosperity  would 
again  attend  farming  pursuits,  and  contentment  would  fill  the 
land. 

With  all  the  advantages  Providence  has  given  us  in  this 
great  country,  with  the  pure  and  simple  republic  bequeathed  to 
us  by  the  heroes  and  statesmen  of  Seventy-Six,  we  ought  to  be 
a  prosperous  and  happy  people.  But,  with  the  blighting  curse 
of  oppressive  monopolies  fastened  upon  us,  upheld  by  bought 
legislation  and  strengthened  .by  the  decisions  of  judges  and 
courts,  who,  from  education,  occupation,  and  sympathy  with 
the  oppressors  of  the  people,  or  from  baser  motives,  have  be 
come  the  special  guardians  of  the  monopolists,  the  laboring 
and  producing  classes  find  it  difficult  to  live,  and,  in  many  in 
stances,  are  being  reduced  to  absolute  want.  The  farmer  has 
abundant  harvests,  but  their  value  is  absorbed  in  oppressive 
charges  for  transportion  to  market,  and  he  is  bound  down 
with  onerous  and  unequal  taxes  until  his  labor  has  ceased  to 


CONCLUSION.  323 

be  remunerative.  While  this  is  true  of  most  industrial  pur 
suits,  the  manufacturer,  protected  by  the  government,  the 
moneyed  men  of  Wall  street,  who  operate  in  gold  and  stocks, 
and  the  railroad  men,  who  are  protected  by  the  decisions  of 
the  courts  of  the  country,  all  amass  princely  fortunes — the  re 
sult  of  special  privileges  bestowed  upon  them.  As  a  neces 
sary  consequence,  the  interests  of  the  country  are  being  divided. 
A  moneyed  "  nobility "  are  arrayed  against  the  laboring 
and  producing  classes.  Special  privileges,  at  war  with  repub 
lican  institutions,  are  granted  them ;  their  wealth  is  virtually 
exempted  from  taxation,  and  they  are  fast  becoming  the  gov 
erning  power,  while  those  who  produce  the  wealth  of  the 
country  are  compelled  to  spend  their  strength  and  devote 
their  lives  to  the  business  of  adding  to  the  wealth  of  their 
oppressors.  It  may  be  asked  why  this  state  of  things  exists. 
There  are  two  reasons  for  it.  First,  the  indifference  mani 
fested  by  the  people  to  the  affairs  of  the  government;  their 
willingness  to  allow  others  to  direct  and  control  the  affairs  of 
the  ration,  while  they  devote  their  time  to  their  own  personal 
interests,  seemingly  forgetful  that  they  have  any  interest  in 
national  affairs,  or  in  the  administration  of  their  own  state 
government,  and  permitting  those  who  now  oppress  them  to 
shape  legislation,  and  to  obtain  those  grants  and  privileges 
which  have  now  become  the  means  of  their  oppression.  The 
second  cause  is  the  disposition  of  those  in  power  to  override 
and  disregard  constitutional  restrictions.  During  the  civil 
war  the  constitution  possessed  no  restrictive  force.  The  law 
of  necessity  governed  ;  the  personal  will  of  those  in  office  was 
the  supreme  law.  Acts  of  congress  were  passed  with  direct 
reference  to  a  state  of  war,  and  decisions  of  courts  were  con 
trolled  by  the  same  causes.  With  the  return  of  peace  these 
laws  remained  unrepealed ;  the  decisions  of  courts  remained 
unreversed ;  constitutional  restrictions  were  deemed  irksome 
and  of  little  moment.  Laws  remained  on  our  statute  book 
which  contravened  the  plain  provisions  of  the  constitution, 
and  the  decisions  of  courts  have  continued  in  the  same  chan 
nel,  until  the  great  charter  of  our  civil  liberty,  has  become  ob 
solete,  and  the  personal  opinions  of  courts,  like  the  edicts  of  a 
monarch,  have  become  the  supreme  law.  Under  this  species 


824  MONOPOLIES   AND   THE   PEOPLE. 

of  legislation,  and  this  class  of  decisions,  these  great  oppres 
sors  of  the  country  have  grown  up  until  their  power  is  supe 
rior  to  that  of  all  other  interests,  and  not  unfrequently  defies 
the  law.  The  first  great  reform  to  be  effected  is  to  re-estab 
lish  the  supremacy  of  the  constitution,  and  to  demand  of  courts 
and  legislators  a  strict  observance  of  its  provisions.  When 
this  is  effected,  the  rights  of  the  states  and  the  people  will  be 
protected.  The  courts  of  the  United  States,  and  all  other  de 
partments  of  the  government,  must  remember  that  in  our  re 
publican  system  the  federal  government  is  limited  and  re 
stricted  to  the  exercise  of  such  powers  as  are  expressly  dele 
gated  to  it,  and  that  all  attempts  to  confer  special  charters  and 
privileges  upon  private  companies  are  usurpations.  They  must 
remember  that  we  have  no  government  with  kingly  preroga 
tives  ;  that  in  a  republic  the  people  retain  control  of  the  purse 
and  sword,  and  that  the  liberties  of  the  people,  the  equality  of 
all  before  the  law,  as  well  as  the  perpetuation  of  republican 
institutions,  are  in  the  care  and  keeping  of  the  sovereign 
people. 

That  there  should  be  some  means  adopted  to  arrest  this  great 
and  growing  power  of  corporations  is  now  forcibly  demon 
strated.  Since  writing  the  preceding  pages,  still  another  fatal 
stab  has  been  given  to  the  republic.  Vanderbilt,  the  leader  in 
the  raid  made  by  corporations  upon  the  liberties  of  the  people, 
and  also  an  operator  in  Wall  street  gambling,  has  added  to 
the  other  roads  under  his  control  the  Lake  Shore  &  Michigan 
Southern  railway,  and  now  controls  the  commerce  of  the 
west  with  the  seaboard,  and  can  fix  the  price  of  a  barrel  of 
fiour,  or  bushel  of  wheat  or  corn,  and  from  his  decision  there 
is  no  appeal.  Extending  these  monopolies  still  further,  Van 
derbilt  and  his  co-conspirators  are  about  to  take  control  of  all 
the  telegraph  lines  in  the  country,  and  dictate  to  the  whole 
people  the  price  to  be  paid  for  dispatches.  Thus  these  enemies 
of  republican  government  are  surely  getting  control  of  all  the 
business  and  commerce  of  the  country.  The  finances,  the  car 
rying  trade,  the  produce  market,  the  price  and  sale  of  manu 
factured  articles,  and  the  means  of  communication  between 
the  different  portions  of  the  country,  are  all  passing  into  the 
hands  of  the  enemies  of  the  people.  At  the  present  time  if 


CONCLUSION.  325 

any  railroad  company  attempts  to  act  independently  and  hon 
estly,  this  combination  of  sharpers  and  swindlers  make  war 
upon  it  and  force  it  to  surrender,  or  drive  it  into  bankrupty. 
JSTo  wonder  that  the  people  are  becoming  alarmed,  and  are 
preparing  for  the  conflict.  The  attempt  made  to  dissolve  the 
Union  was  an  open  and  bold  one.  The  people  met  the  issue, 
and  triumphed.  The  attempt  made  to  divide  the  country 
aroused  the  national  patriotism.  The  attempt  of  this  great 
combination  of  monopolists  to  obtain  absolute  control  of  the 
government,  the  finances,  and  commerce  of  the  country,  pre 
sents  more  serious  cause  for  alarm  than  did  the  attempt  to 
dissolve  the  Union.  Our  institutions  cease  to  be  of  any  value 
when  they  are  perverted  to  means  of  oppression.  When 
men  in  high  official  positions  trifle  with  the  liberties  of  the 
people  and  encourage  their  oppressors,  an  indignant  constitu 
ency  should  hurl  them  from  power.  If,  knowing  the  wrongs 
that  are  committed  against  us,  the  encroachments  being  made 
on  pur  liberties,  the  threatened  and  partially  accomplished 
destruction  of  republican  institutions,  we  silently  acquiesce,  we 
are  not  freemen,  and  we  deserve  to  be  held  as  the  bond 
servants  of  our  oppressors  for  all  time  to  come.  But  while 
the  people  are  long-suffering  and  patient  under  adversity, 
there  is  a  point  beyond  which  their  oppressors  cannot  venture 
without  arousing  them  to  action.  That  point  is  now  reached ; 
the  fiat  of  the  sovereign  power  in  this  land  has  gone  forth ;  the 
voice  of  the  people  is  heard  from  all  portions  of  our  common 
country  demanding  redress,  and  that  the  government  shall  be 
brought  back  to  constitutional  limits ;  that  the  power  of  their 
oppressors  shall  be  destroyed ;  that  their  rights  as  freemen 
shall  be  restored  to  them ;  that  the  halls  of  legislation  and  the 
courts  of  justice  shall  be  filled  by  men  who  do  not  legislate  for 
bribes,  and  who  administer  justice  without  respect  to  persons 
or  interests,  and  prize  constitutional  restrictions  and  the  liber 
ties  of  the  people  above  the  interests  of  corporations  and  rings 
formed  to  oppress  them.  If  redress  cannot  be  obtained  at  the 
ballot-box ;  if  the  influences  which  now  control  the  govern 
ment  and  business  of  the  country  cannot  be  overcome ;  if  re 
dress  is  denied  in  legislative  halls  and  in  the  courts  —  then  the 
people  have  the  right,  the  "  God-given  right,"  to  arise  in  their 


326  MONOPOLIES   AND   THE   PEOPLE. 

sovereign  power  and  take  what  their  servants  have  refused  to 
give  them.  If  reform  cannot  be  obtained,  or  the  wrongs  of 
the  people  redressed  in  any  other  method,  a  resort  should  be 
had  to  revolution  —  peaceable,  if  possible,  but  such  as  will  bring 
the  country  back  to  the  days  of  its  purity,  and  compel  all  to 
acknowledge  the  sacred  binding  force  of  the  constitution. 

Having  an  abiding  confidence  that  the  reform  being  inaugu 
rated  by  the  farmers  of  the  country  will  advance  to  a  triumph 
ant  issue,  we  present  this  volume  to  the  public,  as  an  humble 
but  honest  champion  of  the  cause,  acknowledging  its  imperfec 
tions,  expecting  criticisms  and  condemnations  from  the  mo 
nopolists  arid  their  dependents,  but  asking  a  careful  perusal 
and  earnest  consideration  of  the  doctrine  advocated. 


APPENDIX. 


APPENDIX 


CHAPTER  I. 


AS  our  position  on  the  "Legal  Tender"  decisions  and  their 
effect  upon  the  finances  and  commerce  of  the  country 
have  been  controverted  by  some  of  the  legal  men  to  whom 
we  have  shown  our  manuscript,  at  the  risk  of  wearying  the 
reader,  we  quote  the  dissenting  opinions  of  the  late  Chief  Jus 
tice  Chase,  and  his  associates,  on  the  points  at  issue  in  those 
cases,  feeling  assured  that  these  opinions  fully  sustain  us.  If 
our  views  are  correct  as  to  the  effect  of  these  decisions  upon 
the  best  interests  of  the  country,  and  their  tendency  to  in 
crease  the  power  of  the  combinations  that  now  have  such  con 
trol  over  the  different  departments  of  the  government,  as  well 
as  the  financial  and  commercial  interests  of  the  country,  it  fol 
lows  that  no  real  relief  from  the  oppressions  under  which  the 
people  are  suffering  can  be  obtained  until  the  legal  tender  stat 
utes  are  repealed,  and  the  latest  decisions  of  the  supreme  court 
as  to  their  constitutionality  and  scope  are  reversed. 

We  have  claimed  that  those  decisions  were  in  conflict  with 
the  provisions  of  the  constitution.  Our  position  is  supported 
by  the  opinions  quoted.  We  have  said  that  the  supreme  court 
of  the  United  States  was  reorganized  in  the  interests  of  rail 
road  corporations  and  other  monopolies,  before  the  legal  ten 
der  questions  were  re-argued  and  reversed.  The  opinions 
quoted  sustain  us  in  this  particular.  But  we  desire  the  reader 
to  examine  these  opinions  and  determine  for  himself. 


41 


CHAPTER  II. 


DISSENTING   OPINION    OF  CHIEF   JUSTICE    CHASE. 

"TT  7E  dissent  from  the  argument  and  conclusion  in  the  opin- 
\\l      ion  just  announced. 

The  rule,  by  which  the  constitutionality  of  an  act  of 
congress  passed  in  the  alleged  exercise  of  an  implied  power  is 
to  be  tried,  is  no  longer,  in  this  court,  open  to  question.  It 
was  laid  down  in  the  case  of  McCulloch  v.  Maryland,  by  Chief 
Justice  Marshall,  in  these  words :  "Let  the  end  be  legitimate, 
let  it  be  within  the  scope  of  the  constitution,  and  all  means 
which  are  appropriate,  which  are  plainly  adapted  to  that  end, 
which  are  not  prohibited  but  consistent  with  the  letter  and 
spirit  of  the  constitution,  are  constitutional." 

And  it  is  the  plain  duty  of  the  court  to  pronouce  acts  of 
congress  not  made  in  the  exercise  of  an  express  power  nor 
coming  within  the  reasonable  scope  of  this  rule,  if  made  in  vir 
tue  of  an  implied  power,  unwarranted  by  the  constitution. 
Acts  of  congress  not  made  in  pursuance  of  the  constitution 
are  not  laws. 

Neither  of  these  propositions  was  questioned  in  the  case  of 
Hepburn  v.  Griswold.  The  judges  who  dissented  in  that  case 
maintained  that  the  clause  in  the  act  of  February  25th,  1862, 
making  the  United  States  notes  a  legal  tender  in  payment  of 
debts,  was  an  appropriate,  plainly  adapted  means  to  a  constitu 
tional  end,  not  prohibited  but  consistent  with  the  letter  and 
spirit  of  the  constitution.  The  majority  of  the  court  as  then 
constituted,  five  judges  out  of  eight,  felt  "obliged  to  conclude 
that  an  act  making  mere  promises  to  pay  dollars  a  legal  ten 
der  in  payments  of  debts  previously  contracted  is  not  a  means 
appropaiate,  plainly  adapted,  really  calculated  to  carry  into 
effect  any  express  power  vested  in  congress,  is  inconsistent 
with  the  spirit  of  the  constitution,  and  is  prohibited  by  the 
constitution." 


APPENDIX.  331 

In  the  case  of  the  United  States  v.  De  Witt,  we  held  unani 
mously  that  a  provision  of  the  internal  revenue  law  prohibit 
ing  the  sale  of  certain  illuminating  oil  in  the  states  was  uncon 
stitutional,  though  it  might  increase  the  production  and  sale 
of  other  oils,  and  consequently  the  revenue  derived  from  them, 
because  this  consequence  was  too  remote  and  uncertain  to  war 
rant  the  court  in  saying  that  the  prohibition  was  an  appropri 
ate  and  plainly  adapted  means  for  carrying  into  execution  the 
power  to  lay  and  collect  taxes. 

We  agree,  then,  that  the  question  whether  a  law  is  a  neces 
sary  and  proper  means  to  execution  of  an  express  power,  within 
the  meaning  x>f  these  words  as  defined  by  the  rule — that  is  to 
say,  a  means  appropriate,  plainly  adapted,  not  prohibited  but 
consistent  with  the  letter  and  spirit  of  the  constitution  —  is  a 
judicial  question.  Congress  may  not  adopt  any  means  for  the 
execution  of  an  express  power  that  congress  may  see  fit  to 
adopt.  It  must  be  a  necessary  and  proper  means  within  the 
fair  meaning  of  the  rule.  If  not  such  it  cannot  be  employed 
consistently  with  the  constitution.  Whether  the  means  actu 
ally  employed  in  a  given  case  are  such  or  not  the  court  must 
decide.  The  court  must  judge  of  the  fact,  congress  of  the  de 
gree  of  necessity. 

A  majority  of  the  court,  five  to  four,  in  the  opinion  which 
has  just  been  read.,  reverses  the  judgment  rendered  by  the 
former  majority  of  five  to  three,  in  pursuance  of  an  opinion 
formed  after  repeated  arguments,  at  successive  terms,  and  care 
ful  consideration;  and  declares  the  legal  tender  clause  to  be 
constitutional;  that  is  to  say,  that  an  act  of  congress  making 
promises  to  pay  dollars  legal  tender  as  coined  dollars  in  pay 
ment  of  pre-existing  debts  is  a  means  appropriate  and  plainly 
adapted  to  the  exercise  of  powers  expressly  granted  by  the 
constitution,  and  not  prohibited  itself  by  the  constitution  but 
consistent  with  its  letter  and  spirit.  And  this  reversal,  unprec 
edented  in*  the  history  of  the  court,  has  been  produced  by  no 
change  in  the  opinions  of  those  who  concurred  in  the  former 
judgment.  One  closed  an  honorable  judicial  career  by  resigna 
tion  after  the  case  had  been  decided,  after  the  opinion  had  been 
read  and  agreed  to  in  conference,  and  after  the  day  when  it 
would  have  been  delivered  in  court,  had  not  the  delivery  been 


332  MONOPOLIES   AND   THE    PEOPLE. 

postponed  for  a  week  to  give  time  for  the  preparation  of  the 
dissenting  opinion.  The  court  was  then  full,  but  the  vacancy 
caused  by  the  resignation  of  Mr.  Justice  Grier  having  been 
subsequently  filled  and  an  additional  justice  having  been  ap 
pointed  under  the  act  increasing  the  number  of  judges  to  nine, 
which  took  effect  on  the  first  Monday  of  December,  1869,  the 
then  majority  find  themselves  in  a  minority  of  the  court,  as 
now  constituted,  upon  the  question. 

Their  convictions,  however,  remain  unchanged.  We  adhere 
to  the  opinion  pronounced  in  Hepburn  v.  Griswold.  Reflection 
has  only  wrought  a  firmer  belief  in  the  soundness  of  the  con 
stitutional  doctrines  maintained,  and  in  the  importance  of  them 
to  the  country. 

We  agree  that  much  of  what  was  said  in  the  dissenting 
opinion  in  that  case,  which  has  become  the  opinion  of  a  ma 
jority  of  the  court  as  now  constituted,  was  correctly  said.  We 
fully  agree  in  all  that  was  quoted  from  Chief  Justice  Marshall. 
We  had  indeed  accepted,  without  reserve,  the  definition  of 
implied  powers  in  which  that  great  judge  summed  up  his 
argument,  of  which  the  language  quoted  formed  a  part.  But 
if  it  was  intended  to  ascribe  to  us  "  the  doctrine  that  when  an 
act  of  congress  is  brought  to  the  test  of  this  clause  of  the  con 
stitution,"  namely,  the  clause  granting  the  power  of  ancillary 
legislation,  "its  necessity  must  be  absolute,  and  its  adaptation 
to  the  conceded  purpose  unquestionable,"  we  must  be  permit 
ted  not  only  to  disclaim  it,  but  to  say  that  there  is  nothing  in 
the  opinion  of  the  then  majority  which  approaches  the  asser 
tion  of  any  such  doctrine.  We  did  indeed  venture  to  cite, 
with  approval,  the  language  of  Judge  Story  in  his  great  work 
on  the  constitution,  that  the  words  necessary  and  proper  were 
intended  to  have  "  a  sense  at  once  admonitory  and  directory," 
and  to  require  that  the  means  used  in  the  execution  of  an  ex 
press  power  "  should  be  bonafide,  appropriate  to  the  end,"  and 
also  ventured  to  say  that  the  tenth  amendment,  reserving  to 
the  states  or  the  people  all  powers  not  delegated  to  the  United 
States  by  the  constitution,  nor  prohibited  by  it  to  the  states, 
u  was  intended  to  have  a  like  admonitory  and  directory  sense," 
and  to  restrain  the  limited  government  established  by  the 
constitution  from  the  exercise  of  powers  not  clearly  delegated 


APPENDIX.  333 

or  derived  by  just  inference  from  powers  so  delegated.  In 
thus  quoting  Judge  Story,  and  in  this  expression  of  our  own 
opinion,  we  certainly  did  not  suppose  it  possible  that  we  could 
be  understood  as  asserting  that  the  clause  in  question  "  was 
designed  as  a  restriction  upon  the  ancillary  power  incidental 
to  every  grant  of  power  in  express  terms."  It  was  this  propo 
sition  which  "was  stated  and  refuted  "  in  McOulloch  v.  Mary 
land.  That  refutation  touches  nothing  said  by  us.  We  assert 
only  that  the  words  of  the  constitution  are  such  as  admonish 
congress  that  implied  powers  are  not  to  be  rashly  or  lightly 
assumed,  aud  that  they  are  not  to  be  exercised  at  all,  unless, 
in  the  words  of  Judge  Story,  they  are  "bonafide  appropriate  to 
the  end,"  or,  in  the  words  of  Chief  Justice  Marshall,  u  appro 
priate,  plainly  adapted"  to  a  constitutional  and  legitimate 
end,  and  "  not  prohibited,  but  consistent  with  the  letter  and 
spirit  of  the  constitution." 

There  appears,  therefore,  to  have  been  no  real  difference  of 
opinion  in  the  court  as  to  the  rule  by  which  the  existence  of 
an  implied  power  is  to  be  tested,  when  Hepburn  v.  Griswold 
was  decided,  though  the  then  minority  seem  to  have  supposed 
there  was.  The  difference  had  reference  to  the  application  of 
the  rule  rather  than  to  the" rule  itself. 

The  then  minority  admitted  that  in  the  powers  relating  to 
coinage,  standing  alone,  there  is  not  "  a  sufficient  warrant  for 
the  exercise  of  the  power  "  to  make  notes  a  legal  tender,  but 
thought  them  "  not  without  decided  weight,  when  we  come  to 
consider  the  question  of  the  existence  of  this  power  as  one 
necessary  and  proper  for  carrying  into  execution  other  admit 
ted  powers  of  the  government."  This  weight  they  found  in 
the  fact  that  an  "  express  power  over  the  lawful  money  of  the 
country  was  confided  to  congress  and  forbidden  to  the  states." 
It  seemed  to  them  not  an  "  unreasonable  inference  "  that,  in  a 
certain  contingency,  "  making  the  securities  of  the  government 
perform  the  office  of  money  in  the  payment  of  debts  would  be 
in  harmony  with  the  power  expressly  granted  to  coin  money." 
We  perceive  no  connection  between  the  express  power  to  coin 
money  and  the  inference  that  the  government  may,  in  any 
contingency,  make  its  securities  perform  the  functions  of 
coined  money,  as  a  legal  tender  in  payment  of  debts.  We 


334  MONOPOLIES  AND  THE   PEOPLE. 

have  supposed  that  the  power  to  exclude  from  circulation 
notes  not  authorized  by  the  national  government'might,  per 
haps,  be  deduced  from  the  power  to  regulate  the  value  of  coin  ; 
but  that  the  power  of  the  government  to  emit  bills  of  credit 
was  an  exercise  of  the  power  to  borrow  money,  and  that  its 
power  over  the  currency  was  incidental  to  that  power  and  to 
the  power  to  regulate  commerce.  This  was  the  doctrine  of  the 
Veazie  Bank  v.  Fenno,  although  not  fully  elaborated  in  that 
case.  The  question  whether  the  quality  of  legal  tender  can 
be  imparted  to  these  bills  depends  upon  distinct  considera 
tions. 

Was,  then,  the  power  to  make  these  notes  of  the  govern 
ment  —  these  bills  of  credit  —  a  legal  tender  in  payments  an 
appropriate,  plainly  adapted  means  to  a  legitimate  and  consti 
tutional  end?  or,  to  state  the  question  as  the  opinion  of  the 
then  minority  stated  it,  "  Does  there  exist  any  power  in  con 
gress,  or  in  the  government,  by  express  grant,  in  execution  of 
which  this  legal  tender  act  was  necessary  and  proper  in  the 
sense  here  defined  and  under  the  circumstances  of  its  pass- 
age?" 

The  opinion  of  the  then  minority  affirmed  the  power  on  the 
ground  that  it  was  a  necessary  and  proper  means,  within  the 
definition  of  the  court,  in  the  case  of  Me  Gulloch  v.  Maryland, 
to  carry  on  war,  and  that  it  was  not  prohibited  by  the 
spirit  or  letter  of  the  constitution,  though  it  was  admitted 
to  be  a  law  impairing  the  obligation  of  contracts,  and  not 
withstanding  the  objection  that  it  deprived  many  persons  of 
their  property  without  compensation  and  without  due  process 
of  law. 

We  shall  not  add  much  to  what  was  said  in  the  opinion  of  the 
then  majority  on- these  points. 

The  reference  made  in  the  opinion  just  read,  as  well  as  in 
the  argument  at  the  bar,  to  the  opinions  of  the  chief  justice, 
when  secretary  of  the  treasury,  seems  to  warrant,  if  it  does  not 
require,  some  observations  before  proceeding  further  in  the 
discussion. 

It  was  his  fortune  at  the  time  the  legal  tender  clause  was 
inserted  in  the  bill  to  authorize  the  issue  of  United  States 
notes  and  received  the  sanction  of  congress,  to  be  charged 


APPENDIX.  335 

with  the  anxious  and  responsible  duty  of  providing  funds  for 
the  prosecution  of  the  war.  In  no  report  made  by  him  to 
congress  was  the  expedient  of  making  the  notes  of  the  United 
States  a  legal  tender  suggested.  He  urged  the  issue  of  notes 
payable  on  demand  in  coin  or  received  as  coin  in  payment  of 
duties.  When  the  state  banks  had  suspended  specie  payments, 
he  recommended  the  issue  of  United  States  notes  receivable 
for  all  loans  to  the  United  States  and  all  government  dues  ex 
cept  duties  on  imports.  In  his  report  of  December,  1862,  he 
said  that  "  United  States  notes  receivable  for  bonds  bearing  a 
secure  specie  interest  are  next  best  to  notes  convertible  into 
coin,"  and  after  stating  the  financial  measures  which  in  his 
judgment  were  advisable,  he  added  :  "  The  secretary  recom 
mends,  therefore,  no  mere  paper  money  scheme,  but  on  the 
contrary  a  series  of  measures  looking  to  a  safe  and  gradual  re 
turn  to  gold  and  silver  as  the  only  permanent  basis,  standard, 
and  measure  of  value  recognized  by  the  constitution."  At  the 
session  of  congress  before  this  report  was  made,  the  bill  con 
taining  the  legal  tender  clause  had  become  a  law.  He  was 
extremely  and  avowedly  averse  to  this  clause,  but  was  very 
solicitous  for  the  passage  of  the  bill  to  authorize  the  issue  of 
United  States  notes  then  pending.  He  thought  it  indispens 
ably  necessary  that  the  authority  to  issue  these  notes  should 
be  granted  by  congress.  The  passage  of  the  bill  was  delayed, 
if  not  jeoparded,  by  the  difference  of  opinion  which  prevailed 
on  the  question  of  making  them  a  legal  tender.  It  was  under 
these  circumstances  that  he  expressed  the  opinion,  when  called 
upon  by  the  committee  of  ways  and  means,  that  it  was  neces 
sary  ;  and  he  was  not  sorry  to  find  it  sustained  by  the  decisions 
of  respected  courts,  not  unanimous  indeed,  nor  without  contra 
ry  decisions  of  state  courts  equally  respectable.  Examination 
and  reflection  under  more  propitious  circumstances  have  satis 
fied  him  that  this  opinion  was  erroneous,  and  he  does  not  hes 
itate  to  declare  it.  He  would  do  so,  just  as  unhesitatingly,  if 
his  favor  to  the  legal  tender  clause  had  been  at  that  time  de 
cided,  and  his  opinion  as  to  the  constitutionality  of  the  meas 
ure  clear. 

Was  the  making  of  the  notes  a  legal  tender  necessary  to  the 
carrying  on  the  war?     In  other  words,  was  it  necessary  to  the 


336  MONOPOLIES   AND    THE    PEOPLE. 

execution  of  the  power  to  borrow  money  ?  It  m  not  the  ques 
tion  whether  the  issue  of  notes  was  necessary,  nor  whether 
any  of  the  financial  measures  of  the  government  were  neces 
sary.  The  issuing  of  the  circulation  commonly  known  as 
greenbacks  was  necessary,  and  was  constitutional.  They  were 
necessary  to  the  payment  of  the  army  and  the  navy  and  to  all 
the  purposes  for  which  the  government  uses  money.  The 
banks  had  suspended  specie  payment,  and  the  government 
was  reduced  to  the  alternative  of  using  their  paper  or  issuing 
its  own. 

Now  it  is  a  common  error,  and  in  our  judgment  it  was  the 
error  of  the  opinion  of  the  minority  in  Hepburn  v.  Griswold, 
and  is  the  error  of  the  opinion  just  read,  that  considerations 
pertinent  to  the  issue  of  United  States  notes  have  been  urged 
in  justification  of  making  them  a  legal  tender.  The  real  ques 
tion  is,  ^"as  the  making  them  a  legal  tender  a  necessary  means 
to  the  execution  of  the  power  to  borrow  money  ?  If  the  notes 
would  circulate  as  well  without  as  with  this  quality  it  is  idle  to 
urge  the  plea  of  such  necessity.  But  the  circulation  of  the 
notes  was  amply  provided  for  by  making  them  receivable  for 
all  national  taxes,  all  dues  to  the  government,  and  all  loans. 
This  was  the  provision  relied  upon  for  the  purpose  by  the  sec 
retary  when  the  bill  was  first  prepared,  and  his  reflections 
since  have  convinced  him  that  it  was  sufficient.  Nobody 
could  pay  a  tax,  or  any  debt,  or  buy  a  bond  without  using  these 
notes.  As  the  notes,  not  being  immediately  redeemable, 
would  undoubtedly  be  cheaper  than  coin,  they  would  be  pre 
ferred  by  debtors  and  purchasers.  They  would  thus,  by  the 
universal  law  of  trade,  pass  into  general  circulation.  As  long 
as  they  were  maintained  by  the  government  at  or  near  par 
value  of  specie  they  would  be  accepted  in  payment  of  all  dues, 
private  as  well  as  public.  Debtors,  as  a  general  rule,  would 
pay  in  nothing  else  unless  compelled  by  suit,  and  creditors 
would  accept  them  as  long  as  they  would  lose  less  by  accept 
ance  than  by  suit.  In  new  transactions,  sellers  would  demand 
and  purchasers  would  pay  the  premium  for  specie  in  the  prices 
of  commodities.  The  difference  to  them,  in  the  currency, 
whether  of  coin  or  of  paper,  would  be  in  the  fluctuations  to 
which  the  latter^is  subject.  So  long  as  notes  should  not  sink 


APPENDIX.  337 

so  low  as  to  induce  creditors  to  refuse  to  receive  them  because 
they  could  not  be  said  to  be  in  any  just  sense  payments  of  debts 
due,  a  provision  for  making  them  a  legal  tender  would  be  with 
out  effect  except  to  discredit  the  currency  to  which  it  was  ap 
plied.  The  real  support  of  note  circulation  not  convertible  on 
demand  into  coin,  is  receivability  for  debts  due  the  govern 
ment,  including  specie  loans,  and  limitation  of  amount.  If 
the  amount  is  smaller  than  is  needed  for  the  transactions  of 
the  country,  and  the  law  allows  the  use  in  these  transactions 
of  but  one  description  of  currency,  the  demand  for  that  de 
scription  will  prevent  its  depreciation.  But  history  shows  no 
instance  of  paper  issues  so  restricted.  An  approximation  in 
limitation  is  all  that  is  possible,  and  this  was  attempted  when 
the  issues  of  United  States  notes  were  restricted  to  one  hun 
dred  and  fifty  millions.  But  this  limit  was  soon  extended  to 
four  hundred  and  fifty  millions,  and  even  this  was  soon  prac 
tically  removed  by  the  provision  for  the  issue  of  notes  by  the 
national  banking  associations  without  any  provision  for  corres 
ponding  reduction  in  the  circulation  of  United  States  notes; 
and  still  further  by  the  laws  authorizing  the  issue  of  interest- 
bearing  securities,  made  a  tender  for  their  amount,  excluding 
interest. 

The  best  support  for  note  circulation  is  not  limitation,  but 
receivability,  especially  for  loans  bearing  coin  interest.  This 
support  was  given  until  the  fall  of  1864,  when  a  loan  bearing 
increased  currency  interest,  payable  in  three  years  and  con 
vertible  into  a  loan  bearing  less  coin  interest,  was  substituted 
for  the  six  per  cent  and  five  per  cent  loans  bearing  specie  in 
terest,  for  which  the  notes  had  been  previously  received. 

It  is  plain  that  a  currency  so  supported  cannot  depreciate 
more  than  the  loans ;  in  other  words,  below  the  general  credit 
of  the  country.  It  will  rise  or  fall  with  it.  At  the  present 
moment,  if  the  notes  were  received  for  five  per  cent  bonds,  they 
would  be  at  par.  In  other  words,  specie  payments  would  be 
resumed. 

Now,  does  making  the  notes  a  legal  tender  increase  their 

value  ?     It  is  said  that  it  does,  by  giving  them  a  new  use. 

The  best  political  economists  say  that  it  does  not.     When  the 

government  compels  the  people  to  receive  its  notes,  it  virtually 

42 


338  MONOPOLIES   AND   THE    PEOPLE. 

declares  that  it  does  not  expect  them  to  be  received  without 
compulsion.  It  practically  represents  itself  insolvent.  This 
certainly  does  not  improve  the  value  of  its  notes.  It  is  an  ele 
ment  of  depreciation.  In  addition,  it  creates  a  powerful  in 
terest  in  the  debtor  class  and  in  the  purchasers  of  bonds  to  de 
press  to  the  lowest  point  the  credit  of  the  notes.  The  cheaper 
these  become,  the  easier  the  payment  of  debts,  and  the  more 
profitable  the  investment?  in  bonds  bearing  coin  interest. 

On  the  other  hand,  the  higher  prices  become,  for  everything 
the  government  needs  to  buy,  and  the  greater  the  accumula- 
•  tion  of  public  as  well  as  private  debt.  It  is  true  that  such  a 
state  of  things  is  acceptable  to  debtors,  investors  in  bonds,  and 
speculators.  It  is  their  opportunity  of  relief  or  wealth.  And 
many  are  persuaded  by  their  representations  that  the  forced 
circulation  is  not  only  a  necessity  but  a  benefit.  But  the  ap 
parent  benefit  is  a  delusion  and  the  necessity  imaginary.  In 
their  legitimate  use,  the  notes  are  hurt  not  helped  by  being 
made  a  legal  tender.  The  legal  tender  quality  is  only  valua 
ble  for  the  purposes  of  dishonesty.  Every  honest  purpose  is 
answered  as  well  and  better  without  it. 

We  have  no  hesitation,  therefor,  in  declaring  our  conviction 
that  the  making  of  these  notes  a  legal  tender  was  not  a  nec 
essary  or  proper  means  to  the  carrying  on  war  or  to  the  exer 
cise  of  any  express  power  of  the  government. 

But  the  absence  of  necessity  is  not  our  only,  or  our  weight 
iest  objection  to  this  legal  tender  clause.  We  still  think,  not 
withstanding  the  argument  adduced  to  the  contrary,  that  it 
does  violate  an  express  provision  of  the  constitution,  and  the 
spirit,  if  not  the  letter,  of  the  whole  instrument.  It  cannot  be 
maintained  that  legislation  justly  obnoxious  to  such  objections 
can  be  maintained  as  the  exercise  of  an  implied  power.  There 
can  be  no  implication  against  the  constitution.  Legislation 
to  be  warranted  as  the  exercise  of  implied  powers  must  not  be 
"  prohibited,  but  consistent  with  the  letter  and  spirit  of  the 
constitution." 

The  fifth  amendment  provides  that  no  person  shall  be  de 
prived  of  life,  liberty,  or  property  without  compensation  or 
due  process  of  law.  The  opinion  of  the  former  minority  says 
that  the  argument  against  the  validity  of  the  legal  tender 


APPENDIX.  889 

clause,  founded  on  this  constitutional  provision,  is  "too  vague 
for  their  perception."  It  says  that  a  "  declaration  of  war  would 
be  thus  unconstitutional, "  because  it  might  depreciate  the  val 
ue  of  property;  and  "the  abolition  of  tariff  on  sugar,  or  iron," 
because  it  might  destroy  the  capital  employed  in  those  manu 
factures;  and  "the  successive  issues  of  government  bonds," 
because  they  might  make  those  already  in  private  hands  less 
valuable.  But  it  seems  to  have  escaped  the  attention  of  the 
then  minority  that  to  declare  war,  to  lay  and  repeal  taxes,  and 
to  borrow  money,  are  all  express  powers,  and  that  the  then  ma 
jority  were  opposing  the  prohibition  of  the  constitution  to  the 
claim  of  an  implied  power.  Besides,  what  resemblance  is 
there  between  the  effect  of  the  exercise  of  these  express  pow 
ers  and  the  operation  of  the  legal  tender  clause  upon  pre-ex 
isting  debts  ?  The  former  are  indirect  effects  of  the  exercise 
of  undisputed  powers.  The  latter  acts  directly  upon  the  rela 
tions  of  debtor  and  creditor.  It  violates  that  fundamental 
principle  of  all  just  legislation  that  the  legislature  shall  not 
take  the  property  of  A  and  give  it  to  B.  It  says  that  B,  who 
has  purchased  a  farm  of  A  for  a  certain  price,  may  keep  the 
farm  without  paying  for  it,  if  he  will  only  tender  certain  notes 
which  may  bear  some  proportion  to  the  price,  or  be  even 
worthless.  It  seems  to  us  that  this  is  a  manifest  violation  of 
this  clause  of  the  constitution. 

We  think  also  that  it  is  inconsistent  with  the  spirit  of  the 
constitution  in  that  it  impairs  the  obligation  of  contracts.  In 
the  opinion  of  the  then  minority  it  is  frankly  said  :  "  Undoubt 
edly  it  is  a  law  impairing  the  obligation  of  contracts  made  be 
fore  its  passage,"  but  it  is  immediately  added :  "  While  the 
constitution  forbids  the  states  to  pass  such  laws,  it  does 'not 
forbid  congress,"  and  this  opinion,  as  well  as  the  opinion  just 
read,  refers  to  the  express  authority  to  establish  a  uniform  sys 
tem  of  bankruptcy  as  a  proof  that  it  was  not  the  intention  of 
the  constitution  to  withhold  that  power.  It  is  true  that  the 
constitution  grants  authority  to  pass  a  bankrupt  law,  but  our 
inference  is,  that  in  this  way  only  can  congress  discharge  the 
obligation  of  contracts.  It  may  provide  for  ascertaining  the 
inability  of  debtors  to  perform  their  contracts,  and,  upon  the 
surrender  of  all  their  property  may  provide  for  their  discharge. 


340  MONOPOLIES    AND    THE    PEOPLE. 

But  this  is  a  very  different  thing  from  providing  that  they  may 
satisfy  contracts  without  payment,  without  pretence  of  ina 
bility,  and  without  any  judicial  proceeding. 

That  congress  possesses  the  general  power  to  impair  the  ob 
ligation  of  contracts  is  a  proposition  which,  to  use  the  language 
of  Chief  Justice  Marshall,  "  must  find  its  vindication  in  a  train 
of  reasoning  not  often  heard  in  courts  of  justice."  "  It  may 
well  be  added,"  said  the  same  great  judge,  "whether  the  na 
ture  of  society  and  of  government  does  not  prescribe  some 
limits  to  legislative  power ;  and,  if  any  be  prescribed,  where 
they  are  to  be  found,  if  the  property  of  an  individual,  fairly 
and  honestly  acquired,  can  be  seized  without  compensation  ? 
To  the  legislature  all  legislative  power  is  granted,  but  the 
question  whether  the  act  of  transferring  the  property  of  an  in 
dividual  to  the  public  is  in  the  nature  of  a  legislative  power  is 
well  worthy  of  serious  reflection." 

And  it"  the  property  of  an  individual  cannot  be  transferred 
to  the  public,  how  much  less  to  another  individual  ? 

Tnese  remarks  of  Chief  Justice  Marshall  were  made  in  a 
case  in  which  it  became  necessary  to  determine  whether  a  cer 
tain  act  of  the  legislature  of  Georgia  was  within  the  constitu 
tional  prohibition  against  impairing  the  obligation  of  contracts. 
And  they  assert  fundamental  principles  of  society  and  govern 
ment  in  which  that  prohibition  had  its  origin.  They  apply 
with  great  force  to  the  construction  of  the  constitution  of  the 
United  States.  In  like  manner  and  spirit  Mr.  Justice  Chase 
had  previously  declared  that  "  an  act  of  the  legislature  contrary 
to  the  great  first  principles  of  the  social  compact  cannot  be 
considered  a  rightful  exercise  of  legislative  authority."  Among 
such  acts  he  instances  "a  law  that  destroys  or  impairs  the  law 
ful  private  contracts  of  citizens."  Can  we  be  mistaken  in  say 
ing  that  such  a  law  is  contrary  to  the  spirit  of  a  constitution 
ordained  to  establish  justice?  Can  we  be  mistaken  in  think 
ing  that  if  Marshall  and  Story  were  here  to  pronounce  judg 
ment  in  this  case  they  would  declare  the  legal  tender  clause 
now  in  question  to  be  prohibited  by  and  inconsistent  with  the 
letter  and  spirit  of  the  constitution  ? 

It  is  unnecessary  to  say  that  we  reject  wholly  the  doctrine, 
advanced  for  the  first  time,  we  believe,  in  this  court,  by  the 


APPENDIX.  341 

present  majority,  that  the  legislature  has  any  "powers  under 
the  constitution  which  grow  out  of  the  aggregate  of  powers 
conferred  upon  the  government,  or  out  of  the  sovereignty  in 
stituted  by  it."  If  this  proposition  be  admitted,  and  it  be  also 
admitted  that  the  legislature  is  the  sole  judge  of  the  necessity 
for  the  exercise  of  such  powers,  the  government  becomes  prac 
tically  absolute  and  unlimited. 

Our  observations  thus  far  have  been  directed  to  the  question 
of  the  constitutionality  of  the  legal  tender  clause  and  its  ope 
ration  upon  contracts  made  before  the  passage  of  the  law.  We 
shall  now  consider  whether  it  be  constitutional  in  its  applica 
tion  to  contracts  made  after  its  passage.  In  other  words, 
whether  congress  has  power  to  make  anything  but  coin  a  legal 
tender. 

And  here  it  is  well  enough  again  to  say  that  we  do  not  ques 
tion  the  authority  to  issue  notes  or  to  fit  them  for  a  circulating 
medium,  or  to  promote  their  circulation  by  providing  for  their 
receipt  in  payment  of  debts  to  the  government,  and  for  re 
demption  either  in  coin  or  in  bonds;  in  short,  to  adapt  them 
to  use  as  currency.  Nor  do  we  question  the  lawfulness  of  con 
tracts  stipulating  for  payment  in  such  notes,  or  the  propriety 
of  enforcing  the  performance  of  such  contracts  by  holding  the 
tender  of  such  currency,  according  to  their  terms,  sufficient. 
The  question  is,  Has  congress  power  to  make  the  notes  of  the 
government,  redeemable  or  irredeemable,  a  legal  tender  with 
out  contract  and  a'gainst  the  will  of  the  person  to  whom  they 
are  tendered  ?  In  considering  this  question  we  assume  as  a 
fundamental  proposition  that  it  is  the  duty  of  every  govern 
ment  to  establish  a  standard  of  value.  The  necessity  of  such 
a  standard  is  indeed  universally  acknowledged.  Without  it 
the  transactions  of  society  would  become  impossible.  All 
measures,  whether  of  extent,  or  weight,  or  value,  must  have 
certain  proportions  of  that  which  they  are  intended  to  meas 
ure.  The  unit  of  extent  must  have  certain  definite  length,  the 
unit  of  weight  certain  definite  gravity,  and  the  unit  of  value 
certain  definite  value.  These  units,  multiplied  or  subdivided, 
supply  the  standards  by  which  all  measures  are  properly  made. 
The  selection,  therefore,  by  the  common  consent  of  all  nations, 
of  gold  and  silver  as  the  standard  of  value  was  natural,  or, 


342  MONOPOLIES  AND   THE   PEOPLE. 

more  correctly  speaking,  inevitable.  For  whatever  definitions 
of  value  political  economists  may  have  given,  they  all  agree 
that  gold  and  silver  have  more  value  in  proportion  to  weight 
and  size,  and  are  less  subject  to  loss  by  wear  or  abrasion  than 
any  other  material  capable  of  easy  subdivision  and  impression, 
and  that  their  value  changes  less  and  by  slower  degrees, 
through  considerable  periods  of  time,  than  that  of  any  other 
substance  which  could  be  used  for  the  same  purpose.  And 
these  are  qualities  indispensable  to  the  convenient  use  of  the 
standard  required.  In  the  construction  of  the  constitutional 
grant  of  power  to  establish  a  standard  of  value,  every  presumption 
is,t  therefore,  against  that  which  would  authorize  the  adoption 
of  any  other  materials  than  those  sanctioned  by  universal  con 
sent. 

But  the  terms  of  the  only  express  grant  in  the  constitution 
of  power  to  establish  such  a  standard  leave  little  room  for  pre 
sumptions.  The  power  conferred  is  the  power  to  coin  money, 
and  these  words  must  be  understood  as  they  were  used  at  the 
time  the  constitution  was  adopted.  And  we  have  been  referred 
to  no  authority  which  at  that  time  defined  coining  otherwise 
than  as  minting  or  stamping  metals  for  money  ;  or  money  oth 
erwise  than  as  metal  coined  for  the  purposes  of  commerce. 
These  are  the  words  of  Johnson,  whose  great  dictionary  con 
tains  no  reference  to  money  of  paper. 

It  is  true  that  notes  issued  by  banks,  both  in  England  and 
America,  were  then  in  circulation,  and  were  used  in  exchanges, 
and  in  common  speech  called  money,  and  that  bills  of  credit, 
issued  both  by  congress  and  by  the  states,  had  been  recently 
in  circulation  under  the  same  general  name ;  but  these  notes 
and  bills  were  never  regarded  as  real  money,  but  were  always 
treated  as  its  representatives  only,  and  were  described  as  cur 
rency.  The  legal  tender  notes  themselves  do  not  purport  to 
be  anything  else  than  promises  to  pay  money.  They  have 
been  held  to  be  securities,  and  therefore  exempt  from  state 
taxation ;  and  the  idea  that  it  was  ever  designed  to  make  such 
notes  a  standard  of  value  by  the  framers  of  the  constitution  is 
wholly  new.  It  seems  to  us  impossible  that  it  could  have  been 
entertained.  Its  assertion  seems  to  us  to  ascribe  folly  to  the 


APPENDIX.  343 

framers  of  our  fundamental  law,  and  to  contradict  the  most 
conspicuous  facts  in  our  public  history. 

The  power  to  coin  money  was  a  power  to  determine  the 
fineness,  weight,  and  denominations  of  the  metallic  pieces  by 
which  values  were  to  be  measured ;  and  we  do  not  perceive 
how  this  meaning  can  be  extended  without  doing  violence  to 
the  very  words  of  the  constitution  by  imposing  on  them  a  sense 
they  were  never  intended  to  bear.  This  construction  is  sup 
ported  by  contemporaneous  and  all  subsequent  action  of  the 
legislature ;  by  all  the  recorded  utterances  of  statesmen  and 
jurists,  and  the  unbroken  tenor  of  judicial  opinion  until  a  very 
recent  period,  when  the  excitement  of  the  civil  war  led  to  the 
adoption,  by  many,  of  different  views. 

The  sense  of  the  convention  which  framed  the  constitution 
is  clear,  from  the  account  given  by  Mr.  Madison  of  what  took 
place  when  the  power  to  emit  bills  of  credit  was  stricken  from 
the  reported  draft.  He  says  distinctly  that  he  acquiesced  in 
the  motion  to  strike  out,  because  the  government  would  not 
be  disabled  thereby  from  the  use  of  public  notes,  so  far  as 
they  would  be  safe  and  proper,  while  it  cut  off  the  pretext  for 
a  paper  currency,  and  particularly  for  making  the  bills  a  ten 
der  either  for  public  or  private  debts.  The  whole  discussion 
upon  bills  of  credit  proves,  beyond  all  possible  question,  that 
the  convention  regarded  the  power  to  make  notes  a  legal  ten 
der  as  absolutely  excluded  from  the  constitution. 

The  papers  of  the  Federalist,  widely  circulated,  in  favor  of 
the  ratification  of  the  constitution,  discuss  briefly  the  power  to 
coin  money,  as  a  power  to  fabricate  metallic  money,  without  a 
hint  that  any  power  to  fabricate  money  of  any  other  descrip 
tion  was  given  to  congress;  and  the  views  which  it  pro 
mulgated  may  be  fairly  regarded  as  the  views  of  those  who 
voted  for  adoption. 

Acting  upon  the  same  views,  congress  took  measures  for  the 
establishment  of  a  mint,  exercising  thereby  the  power  to  coin 
money,  and  has  continued  to  exercise  the  same  power,  in  the 
same  way,  until  the  present  day.  It  established  the  dollar  as 
the  money  unit,  determined  the  quantity  and  quality  of  gold 
and  silver  of  which  each  coin  should  consist,  and  prescribed 
the  denominations  and  forms  of  all  coins  to  be  issued.  Until 


344  MONOPOLIES  AND   THE   PEOPLE. 

recently  no  one  in  congress  ever  suggested  that  that  body  pos 
sessed  power  to  make  anything  else  a  standard  of  value. 

Statesmen  who  have  disagreed  widely  on  other  points  have 
agreed  in  the  opinion  that  the  only  constitutional  measures  of 
value  are  metallic  coins,  struck  as  regulated  by  the  authority 
of  congress.  Mr.  Webster  expressed  not  only  his  opinion  but 
the  universal  and  settled  conviction  of  the  country  when  he 
said :  "  Most  unquestionably  there  is  no  legal  tender,  and 
there  can  be  no  legal  tender  in  this  country,  under  the  author 
ity  of  this  government  or  any  other,  but  gold  and  silver,  either 
the  coinage  of  our  mints  or  foreign  coin  at  rates  regulated  by 
congress.  This  is  a  constitutional  principle,  perfectly  plain 
and  of  the  very  highest  importance.  The  states  are  prohibited 
from  making  anything  but  gold  and  silver  a  tender  in  pay 
ment  of  debts,  and  although  no  such  express  prohibition  is 
applied  to  congress,  yet  as  congress  has  no  power  granted  to  it  in 
this  respect  but  to  coin  money  and  regulate  the  value  of  foreign  coin, 
it  clearly  has  no  power  to  substitute  paper  or  anything  else  for 
coin  as  a  tender  in  payment  of  debts  and  in  discharge  of  con 
tracts." 

And  this  court,  in  (jrwin  v.  Breedlove,  said :  "  By  the  constitu 
tion  of  the  United  States  gold  and  silver  coin  made  current  by  law 
can  only  be  tendered  in  payment  of  debts."  And  in  The  United 
States  v.  Marigold,  this  court,  speaking  of  the  trust  and  duty 
of  maintaining  a  uniform  and  pure  metallic  standard  of  uniform 
value  throughout  the  Union,  said  :  "  The  power  of  coining 
money  and  regulating  its  value  was  delegated  to  congress  by  the 
constitution  for  the  very  purpose,  as  assigned  by  the  framers  of 
that  instrument,  of  creating  and  preserving  the  uniformity  and  pu 
rity  of  such  a  standard  of  value" 

The  present  majority  of  the  court 'say  that  legal  tender  notes 
"have  become  the  universal  measure  of  values,"  and  they  hold 
that  the  legislation  of  congress,  substituting  such  measures  for 
coin  by  making  the  notes  a  legal  tender  in  payment,  is  war 
ranted  by  the  constitution. 

But  if  the  plain  sense  of  words,  if  the  contemporaneous 
exposition  of  parties,  if  common  consent  in  understanding,  if 
the  opinions  of  courts  avail  anything  in  determing  the  mean 
ing  of  the  constitution,  it  seems  impossible  to  doubt  that  the 


APPENDIX.  345 

power  to  coin  money  is  a  power  to  establish  a  uniform  standard 
of  value,  and  that  no  other  power  to  establish  such  a  standard, 
by  making  notes  a  legal  tender,  is  conferred  upon  congress  by 
the  constitution. 

My  brothers  Clifford  and  Field  concur  in  these  views,  but 
in  consideration  of  the  importance  of  the  principles  involved 
will  deliver  their  separate  opinions.  My  brother  Kelson  also 
dissents. 


43 


CHAPTER   III. 


DISSENTING    OPINION    OF   JUSTICE    CLIFFORD. 

MONEY,  in  the  constitutional  sense,  means  coins  of  gold 
and  silver  fabricated  and  stamped  by  authority  of  law 
as  a  measure  of  value,  pursuant  to  the  power  vested  in 
congress  by  the  constitution. 

Coins  of  copper  may  also  be  minted  for  small  fractional  cir 
culation,  as  authorized  by  law  and  the  usage  of  the  government 
for  eighty  years,  but  it  is  not  necessary  to  disc  ass  that  topic  at 
large  in  this  investigation. 

Even  the  authority  of  congress  upon  the  general  subject  does 
not  extend  beyond  the  power  to  coin  money,  regulate  the  value 
thereof  and  of  foreign  coin. 

Express  power  is  also  conferred  upon  congress  to  fix  the 
standard  of  weights  and  measures,  and  of  course  that  standard, 
as  applied  to  future  transactions,  may  be  varied  or  changed  to 
promote  the  public  interest,  but  the  grant  of  power  in  respect 
to  the  standard  of  value  is  expressed  in  more  guarded  lan 
guage,  and  the  grant  is  much  more  restricted. 

Power  to  fix  the  standard  of  weights  and  measures  is  evi 
dently  a  power  of  comparatively  wide  discretion,  but  the  power 
to  regulate  the  value  of  the  money  authorized  by  the  constitu 
tion  to  be  coined  is  a  definite  and  precise  grant  of  power,  ad 
mitting  of  very  little  discretion  in  its  exercise,  and  is  not  equiv 
alent,  except  to  a  very  limited  extent,  to  the  power  to  fix  the 
standard  of  weights  and  measures,  as  the  money  authorized 
by  that  clause  of  the  constitution  is  coined  money,  and  as  a 
necessary  consequence  must  be  money  of  actual  value,  fabri- 
crated  from  the  precious  metals  generally  used  for  that  pur 
pose  at  the  period  when  the  constitution  was  framed. 

Coined  money,  such  as  is  authorized  by  that  clause  of  the 
instrument,  consists  only  of  the  coins  of  the  United  States  fa- 


APPENDIX.  347 

bricated  and  stamped  by  authority  of  law,  and  is  the  same 
money  as  that  described  in  the  next  clause  of  the  same  section 
as  the  current  coins  of  the  United  States,  and  is  the  same 
money  also  as  "the  gold  and  silver  coins"  described  in  the 
tenth  section  of  the  same  article,  which  prohibits  the  states 
from  coining  money,  emitting  bills  of  credit,  or  making  "  any 
thing  but  gold  and  silver  coin  a  tender  in  payment  of  debts." 

Intrinsic  value  exists  in  gold  and  silver,  as  well  before  as 
after  it  is  fabricated  and  stamped  as  coin,  which  shows  conclu 
sively  that  the  principal  discretion  vested  in  congress  under 
that  clause  of  the  constitution  consists  in  the  power  to  deter 
mine  the  denomination,  fineness,  or  value  and  description  of 
the  coins  to  be  struck,  and  the  relative  proportion  of  gold  or 
silver,  whether  standard  or  pure,  and  the  proportion  of  alloy 
to  be  used  in  minting  the  coins,  and  to  prescribe  the  mode  in 
which  the  intended  object  of  the  grant  shall  be  accomplished 
and  carried  into  practical  effect. 

Discretion,  to  some  extent,  in  prescribing  the  value  of  the 
coins  minted,  is  beyond  doubt  vested  in  congress,  but  the  plain 
intent  of  the  constitution  is  that  congress,  in  determining  that 
matter,  shall  be  governed  chiefly  by  the  weight  and  intrinsic 
value  of  the  coinc,  as  it  is  clear  that  if  the  stamped  value  of 
the  same  should  much  exceed  the  real  value  of  gold  and  silver 
not  coined,  the  minted  coins  would  immediately  cease  to  be 
either  current  coins  or  a  standard  of  value  as  contemplated  by 
the  constitution.  Commercial  transactions  imperiously  re 
quire  a  standard  of  value,  and  the  commercial  world,  at  a  very 
early  period  in  civilization,  adopted  gold  and  silver  as  the  true 
standard  for  that  purpose,  and  the  standard  originally  adopted 
has  ever  since  continued  to  be  so  regarded  by  universal  consent 
to  the  present  time. 

Paper  emissions  have,  at  one  time  or  another,  been  author 
ized  and  employed  as  currency  by  most  commercial  nations, 
and  by  no  government,  past  or  present,  more  extensively  than 
by  the  United  States,  and  yet'it  is  safe  to  affirm  that  all  expe 
rience  in  its  use  as  a  circulating  medium  has  demonstrated  the 
proposition  that  it  cannot  by  any  legislation,  however  strin 
gent,  be  made  a  standard  of  value  or  the  just  equivalent  of 
gold  and  silver.  Attempts  of  the  kind  have  always  failed,  and 


348  MONOPOLIES    AND   THE    PEOPLE. 

no  body  of  men,  whether  in  public  or  private  stations,  ever 
had  more  instructive  teachings  of  the  truth  of  that  remark 
than  the  patriotic  men  who  framed  the  federal  constitution,  as 
they  had  seen  the  power  to  emit  bills  of  credit  freely  exercised 
during  the  war  of  the  Revolution,  not  only  by  the  confedera 
tion,  but  also  by  the  states,  and  knew  from  bitter  experience 
its  calamitous  effects  and  the  utter  worthlessness  of  such  a  cir 
culating  medium  as  a  standard  of  value.  Such  men  so  in 
structed  could  not  have  done  otherwise  than  they  did  do,  which 
was  to  provide  an  irrepealable  standard  of  value,  to  be  coined 
from  gold  and  silver,  leaving  as  little  upon  the  subject  to  the 
discretion  of  congress  as  was  consistent  with  a  wise  forecast 
and  an  invincible  determination  that  the  essential  principles  of 
the  constitution  should  be  perpetual  as  the  means  to  secure 
the  blessings  of  liberty  to  themselves  and  their  posterity. 

Associated  as  the  grant  to  coin  money  and  regulate  the  value 
thereof  is  with  the  grant  to  fix  the  standard  of  weights  and 
measures,  the  conclusion,  when  that  fact  is  properly  weighed 
in  connection  with  the  words  of  the  grant,  is  irresistible  that 
the  purpose  of  the  framers  of  the  constitution  was  to  provide 
a  permanent  standard  of  value  which  should,  at  all  times  and 
under  all  circumstances,  consist  of  coin,  fabricated  and  stamped, 
from  gold  and  silver,  by  authority  of  law,  and  that  they  in 
tended  at  the  same  time  to  withhold  from  congress,  as  well  as 
from  the  States,  the  power  to  substitute  any  other  money  as  a 
standard  of  value  in  matters  of  finance,  business,  trade,  or 
commerce. 

Support  to  that  view  may  also  be  drawn  from  the  last  words 
of  the  clause  giving  congress  the  unrestricted  power  to  regulate 
the  value  of  foreign  coin,  as  it  would  be  difficult  if  not  impos 
sible  to  give  full  effect  to  the  standard  of  value  prescribed  by 
the  constitution,  in  times  of  fluctuation,  if  the  circulating  me 
dium  could  be  supplied  by  foreign  coins  not  subject  to  any 
congressional  regulation  as  to  their  value. 

Exclusive  power  to  regulate  the  alloy  and  value  of  the  coin 
struck  by  their  own  authority,  or  by  the  authority  of  the  states, 
was  vested  in  congress  under  the  confederation,  but  the  con 
gress  was  prohibited  from  enacting  any  regulation  as  to  the 


APPENDIX.  349 

value  of  the  coins  unless  nine  states  assented  to  the  proposed 
regulation. 

Subject  to  the  power  of  congress  to  pass  such  regulations  it 
is  unquestionably  true  that  the  states,  under  the  confederation 
as  well  as  the  United  States,  possessed  the  power  to  coin  money, 
but  the  constitution,  when  it  was  adopted,  denied  to  the  states 
all  authority  upon  the  subject,  and  also  ordained  that  they 
should  not  make  anything  but  gold  and  silver  coin  a  tender  in 
payment  of  debts. 

Beyond  all  doubt  the  framers  of  the  constitution  intended 
that  the  money  unit  of  the  United  States,  for  measuring  val 
ues,  should  be  one  dollar,  as  the  word  dollar  in  the  plural  form 
is  employed  in  the  body  of  the  constitution,  and  also  in  the 
seventh  amendment,  recommended  by  congress  at  its  first  ses 
sion  after  the  Constitution  was  adopted.  Two  years  before 
that,  to-wit,  July  6,  1785,  the  congress  of  the  confederation 
enacted  that  the  money  unit  of  the  United  States  should  "be 
one  dollar,"  and  one  year  later,  to-wit,  August  8,  1786,  they 
established  the  standard  for  gold  and  silver,  and  also  provided 
that  the  money  of  account  of  the  United  States  should  corres 
pond  with  the  coins  established  by  law. 

On  the  4th  of  March,  1789,  congress  first  assembled  under 
the  constitution,  and  proceeded  without  unnecessary  delay  to 
enact  such  laws  as  were  necessary  to  put  the  government  in 
opperation  which  the  constitution  had  ordained  and  estab 
lished.  Ordinances  had  been  passed  during  the  confederation 
to  organize  the  executive  departments,  and  for  the  establish 
ment  of  a  mint,  but  the  new  constitution  did  not  perpetuate 
any  of  those  laws,  and  yet  congress  continued  to  legislate  for 
a  period  of  three  years  before  any  new  law  was  passed  prescrib 
ing  the  money  unit  or  the  money  of  account,  either  for  "  the 
public  offices  "  or  for  the  courts.  Throughout  that  period  it 
must  have  been  understood  that  those  matters  were  impliedly 
regulated  by  the  constitution,  as  tariffs  were  enacted,  tonnage 
duties  imposed,  laws  passed  for  the  collection  of  duties,  the 
several  executive  departments  created,  and  the  judiciary  of 
the  United  States  organized  and  empowered  to  exercise  full 
jurisdiction  under  the  constitution. 

Duties  of  tonnage  and  import  duties  were  required,  by  the 


350  MONOPOLIES   AND   THE    PEOPLE. 

act  of  the  31st  of  July,  1789,  to  be- paid  "in  gold  and  silver 
coin,"  and  congress,  in  the  same  act,  adopted  comprehensive 
regulations  as  to  the  value  of  foreign  coin,  but  no  provision 
was  made  for  coining  money  or  for  a  standard  of  value,  except 
so  far  as  that  subject  is  involved  in  the  regulation  as  to  the 
value  of  foreign  coin,  or  for  a  money  unit,  nor  was  any  regula 
tion  prescribed  as  to  the  money  of  account.  Revenue  for  the 
support  of  the  government,  under  those  regulations,  was  to  be 
derived  solely  from  duties  of  tonnage  and  import  duties,  and 
the  express  provision  was  that  those  duties  should  be  collected 
in  gold  and  silver  coin. 

Legislation  under  the  constitution  had  proceeded  thus  far 
before  the  treasury  department  was  created.  Treasury  regu 
lations  for  the  collection,  safe-keeping,  and  disbursement  of 
the  public  moneys  became  indispensable,  and  congress,  on  the 
2d  September,  1789,  passed  the  act  to  establish  the  treasury 
department,  which  has  ever  since  remained  in  force.  By  that 
act,  the  secretary  of  the  treasury  is  declared  to  be  the  head  of 
the  department,  and  it  is  made  his  duty,  among  other  things, 
to  digest  and  prepare  plans  for  the  improvement  and  manage 
ment  of  the  public  finances  and  for  the  support  of  the  public 
credit ;  to  prepare  and  report  estimates  of  the  public  revenue 
and  of  the  public  expenditures ;  to  superintend  the  collection 
of  the  revenue ;  to  prescribe  forms  of  keeping  and  stating  ac 
counts  arrd  for  making  returns ;  to  grant  all  warrants  for  mon 
eys  to  be  issued  from  the  treasury,  in  pursuance  of  appropria 
tions  by  law,  and  to  perform  all  such  services  relative  to  the 
finances  as  he  shall  be  directed  to  perform. 

Moneys  collected  from  duties  of  tonnage  and  from  import 
duties  constituted  at  that  period  the  entire  resources  of  the  na 
tional  treasury,  and  the  antecedent  act  of  congress,  providing 
for  the  collection  of  those  duties,  imperatively  required  that 
all  such  duties  should  be  paid  in  gold  and  silver  coin,  from 
which  it  follows  that  the  moneys  mentioned  in  the  act  creating 
the  treasury  department  were  moneys  of  gold  and  silver  coin 
which  were  collected  as  public  revenue  from  the  duties  of  ton 
nage  and  import  duties  imposed  by  the  before-mentioned  prior 
acts  of  congress.  Appropriations  made  by  congress  were  un 
derstood  as  appropriations  of  moneys  in  the  treasury,  and  all 


APPENDIX.  351 

warrants  issued  by  the  secretary  of  the  treasury  were  under  • 
stood  to  be  warrants  for  the  payment  of  gold  and  silver  coin 
Forms  for  keeping  and  stating  accounts,  and  for  making  re 
turns,  and  for  warrants  for  moneys  to  be  issued  from  the  treas 
ury  were  prescribed,  and  in  all  those  forms  the  secretary  of 
the  treasury  adopted  the  money  unit  recognized  in  the  consti 
tution,  and  which  had  been  ordained  four  years  before  by  the 
congress  of  the  confederation. 

Argument  to  show  that  the  national  treasury  was  organized 
on  the  basis  that  the  gold  and  silver  coins  of  the  United  States 
were  to  be  the  standard  of  value  is  unnecessary,  as  it  is  a  histor 
ical  fact  which  no  man  or  body  of  men  can  ever  successfully 
contradict.  Public  attention  had  been  directed  to  the  neces 
sity  of  establishing  a  mint  for  the  coinage  of  gold  and  silver, 
several  years  before  the  convention  met  to  frame  the  constitu 
tion,  and  a  committee  was  appointed  by  the  congress  of  the 
confederation  to  consider  and  report  upon  the  subject.  They 
reported  on  the  21st  February,  1782,  more  than  a  year  before 
the  treaty  of  peace,  in  favor  of  creating  such  an  establishment, 
and  on  the  16th  of  October,  1786,  the  congress  adopted  an  or 
dinance  providing  that  a  mint  should  be  established  for  the 
coinage  of  gold,  silver,  and  copper,  agreeable  to  the  resolves 
of  congress  previously  mentioned,  which  prescribed  the  stand 
ard  of  gold  and  silver,  and  recognized  the  money  unit  estab 
lished  by  the  resolves  passed  in  the  preceding  year. 

Congressional  legislation  organizing  the  new  government 
had  now  progressed  to  the  point  where  it  became  necessary  to 
re-examine  that  subject  and  to  make  provision  for  the  exercise 
of  the  power  to  coin  money,  as  authorized  by  the  constitution. 
Pursuant  to  that  power,  congress,  on  April  2d,  1792,  passed 
the  act  establishing  a  mint  for  the  purpose  of  a  national  coin 
age,  and  made  provisions,  among  other  things,  that  coins  of 
gold  and  silver,  of  certain  fineness  and  weight,  and  of  certain 
denominations,  value,  and  descriptions,  should  be  from  time 
to  time  struck  and  coined  at  the  said  mint.  Specific  provis 
ion  is  there  made  for  coining  gold  and  silver  coins,  as  follows : 
First,  gold  coins,  to-wit :  Eagles  of  the  value  of  ten  dollars  or 
units;  half-eagles  of  the  value  of  five  dollars;  quarter-eagles 
of  the  value  of  two  and  a  half  dollars,  the  act  specifying  in 


352  MONOPOLIES   AND   THE    PEOPLE. 

each  case  the  numher  of  grains  and  fractions  of  a  grain  the 
coin  shall  contain,  whether  fabricated  from  pure  or  standard 
gold.  Second,  silver  coins,  to- wit ;  "DOLLARS  OR  UNITS,''  each 
to  contain  371  grains  and  4/10  ths  parts  of  a  grain  of  pure  silver, 
or  416  grains  of  standard  silver.  Like  provision  is  also  made 
for  the  coinage  of  half-dollars,  quarter-dollars,  dimes,  and  half- 
dimes,  and  also  for  the  coinage  of  certain  copper  coins,  but  it 
is  not  necessary  to  enter  much  into  those  details  in  this  case. 

Provision,  it  must  be  conceded,  is  not  there  made,  in  express 
terms,  that  the  money  unit  of  the  United  States  shall  be  one 
dollar,  as  in  the  ordinance  passed  during  the  confederation, 
but  the  act  under  consideration  assumes  throughout  that  the 
coin  called  dollar  is  the  coin  employed  for  that  purpose,  as  is 
obvious  from  the  fact  that  the  words  dollars  and  units  are 
treated  as  synonymous,  and  that  all  the  gold  coins  previously 
described  in  the  same  section  are  measured  by  that  word  as 
the  acknowledged  money  unit  of  the  constitution.  Very  strong 
doubts  are  entertained  whether  an  act  of  congress  is  absolutely 
necessary  to  constitute  the  gold  and  silver  coins  of  the  United 
States,  fabricated  and  stamped  as  such  by  the  proper  executive 
officers  of  the  mint,  a  legal  tender  in  payment  of  debts.  Con 
stituted,  as  such  coins  are,  by  the  constitution,  the  standard  of 
value,  the  better  opinion  would  seem  to  be  that  they  become 
legal  tender  for  that  purpose,  if  minted  of  the  required  weight 
and  fineness,  as  soon  as  they  are  coined  and  put  in  circulation 
by  lawful  authority,  but  it  is  unnecessary  to  decide  that  ques 
tion  in  this  case,  as  the  congress,  by  the  16th  section  of  the 
act  establishing  a  mint,  provided  th?t  all  the  gold  and  silver 
coins  which  shall  have  been  struck  at,  and  issued  from,  the 
said  mint  shall  be  a  lawful  tender  in  all  payments  whatsoever 
—  those  of  full  weight  "according  to  the  respective  values 
herein  declared,  and  those  of  less  than  full  weight  at  values 
proportioned  to  their  respective  weights."  Such  a  regulation 
is  at  all  events  highly  expedient,  as  all  experience  shows  that 
even  gold  and  silver  coins  are  liable  to  be  diminished  in  weight 
by  wear  and  abrasion,  even  if  it  is  not  absolutely  necessary  in 
order  to  constitute  the  coins,  if  of  full  weight,  a  legal  tender. 

Enough  has  already  been  remarked  to  show/ that  the  money 
unit  of  the  United  States  is  the  coined  dollar,  described  in  the 


APPENDIX.  353 

act  establishing  the  mint,  but  if  more  be  wanted  it  will  be 
found  in  the  twentieth  section  of  that  act,  which  provides  that 
the  money  of  account  of  the  United  States  shall  be  expressed 
in  dollars  or  units,  dimes  or  tenths,  &c.,  and  that  all  accounts 
in  the  public  offices,  and  all  proceedings  in  the  federal  courts, 
shall  be  kept  and  had  in  conformity  to  that  regulation. 

Completed,  as  the  circle  of  measures  adopted  by  congress 
were,  to  put  the  new  government  into  successful  operation,  by 
the  passage  of  that  act,  it  will  be  instructive  to  take  a  brief 
review  of  the  important  events  which  occurred  within  the 
period  of  ten  years  next  preceding  its  passage,  or  of  the  ten 
years  next  following  the  time  when  that  measure  was  first 
proposed  in  the  congress  of  the  confederation.  Two  reasons 
suggest  the  21st  of  February,  1782,  as  the  time  to  commence 
the  review,  in  addition  to  the  fact  that  it  was  on  that  day  that 
the  committee  of  congress  made  their  report  approving  of  the 
project  to  establish  a  national  mint.  They  are  as  follows  :  (1) 
Because  that  date  just  precedes  the  close  of  the  war  of  the  Rev 
olution  ;  and  (2)  because  the  date  at  the  same  time  extends 
back  to  a  period  when  all  America  had  come  to  the  conclusion 
that  all  the  paper  currency  in  circulation  was  utterly  worthless, 
and  that  nothing  was  fit  for  a  standard  of  value  but  gold  and 
silver  coin  fabricated  and  stamped  by  the  national  authority. 
Discussion  upon  the  subject  was  continued,  and  the  ordinance 
was  passed,  but  the  measure  was  not  put  in  operation,  as  the 
convention  met  the  next  year,  and  the  constitution  was  framed, 
adopted,  and  ratified,  the  president  and  the  members  of  con 
gress  were  elected,  laws  were  passed,  the  judicial  system  was 
organized,  the  executive  departments  were  created,  the  reve 
nue  system  established,  and  provision  was  made  to  execute  the 
power  vested  in  congress  to  coin  money  and  provide  a  stand 
ard  of  value,  as  ordained  by  the  constitution. 

Perfect  consistency  characterizes  the  measures  of  that  entire 
period  in  respect  to  the  matter  in  question,  and  it  would  be 
strange  if  it  had  been  otherwise,  as  the  whole  series  of  meas 
ures  were  to  a  very  large  extent  the  doings  of  the  same  class 
of  men,  whether  the  remark  is  applied  to  the  old  congress,  or 
the  convention  which  framed  the  constitution,  or  to  the  first 
and  second  sessions  of  the  new  congress,  which  passed  the 
44 


354  MONOPOLIES   AND   THE   PEOPLE. 

laws  referred  to  and  put  the  new  system  of  government  under 
the  constitution  into  full  operation.  Wise  and  complete  as 
those  laws  were,  still  some  difficulties  arose,  as  the  several 
states  had  not  adopted  the  money  unit  of  the  United  States, 
nor  the  money  of  account  prescribed  by  the  twentieth  section 
of  the  act  establishing  the  mint.  Such  embarrassments,  how 
ever,  were  chiefly  felt  in  the  federal  courts,  and  they  were  not 
of  long  continuance,  as  the  several  states,  one  after  another,  in 
pretty  rapid  succession,  adopted  the  new  system  established 
by  congress  both  as  to  the  money  unit  and  the  money  of  ac 
count.  Virginia,  December  19th,  1792,  re-enacted  that  section 
in  the  act  of  congress  without  any  material  alteration,  and 
New  Hampshire,  on  the  20th  of  February,  1794,  passed  a  sim 
ilar  law.  Massachusetts  adopted  the  same  provision  the  next 
year,  and  so  did  Rhode  Island  and  South  Carolina.  Georgia 
concurred  on  the  22d  of  February,  1796,  and  New  York  on 
the  27th  of  January,  1797,  and  all  the  other  states  adopted  the 
same  regulation  in  the  course  of  a  few  years.  State  concur 
rence  was  essential  in  those  particulars  to  the  proper  workirg 
of  the  new  system,  and  it  was  cheerfully  accorded  by  the  state 
legislatures  without  unnecessary  delay. 

Congress  established  as  the  money  unit  the  coin  mentioned 
in  the  constitution,  and  the  one  which  had  been  adopted  as 
such  seven  years  before  in  the  resolve  passed  by  the  congress 
of  the  confederation.  Dollars,  and  decimals  of  dollars,  were 
adopted  as  the  money  of  account  by  universal  consent,  as  may 
be  inferred  from  the  unanimity  exhibited  by  the  states  in  fol 
lowing  the  example  of  congress.  Nothing  remained  for  con 
gress  to  do  to  perfect  the  new  system  but  to  execute  the  power 
to  coin  money  and  regulate  the  value  thereof,  as  it  is  clear 
that  the  constitution  makes  no  provision  for  a  standard  of  value 
unless  the  power  to  establish  it  is  conferred  by  that  grant. 

Power  to  fix  the  standard  of  weights  and  measures  is  vested 
in  congress  by  the  constitution  in  plain  and  unambiguous  terms, 
and  it  was  never  doubted,  certainly  not  until  within  a  recent 
period,  that  the  power  conferred  to  coin  money  or  to  fabricate 
and  stamp  coins  from  gold  and  silver,  which  in  the  constitu 
tional  sense  ;s  the  same  thing,  together  with  the  power  to  de 
termine  the  fineness,  weight,  and  denominations  of  the  moneys 


APPENDIX.  355 

coined,  was  intended  to  accomplish  the  same  purpose  as  to 
values.  Indubitably  it  was  so  understood  by  congress  in  pre 
scribing  the  various  regulations  contained  in  the  act  establish 
ing  the  national  mint,  and  it  continued  to  be  so  understood  by 
all  branches  of  the  government  —  executive,  legislative,  and 
judicial  —  and  by  the  whole  people  of  the  United  States,  for 
the  period  of  seventy  years  from  the  passage  of  that  act. 

New  regulations  became  necessary,  and  were  passed  in  the 
meantime,  increasing  slightly  the  proportion  of  alloy  used  in 
fabricating  the  gold  coins,  but  if  those  enactments  are  care 
fully  examined,  it  will  be  found  that  no  one  of  them  contains 
anything  inconsistent  in  principle  with  the  views  here  ex 
pressed.  Gold,  at  the  time  the  act  establishing  the  mint  be 
came  a  law,  was  valued  15  to.l  as  compared  with  silver, 
but  the  disparity  in  value  gradually  increased,  and  to  such  an 
extent  that  the  gold  coins  began  to  disappear  from  circulation, 
and,  to  remedy  that  evil,  congress  found  it  necessary  to  aug 
ment  the  relative  proportion  of  alloy  by  diminishing  the 
required  amount  of  gold,  whether  pure  or  standard.  Eagles 
coined  under  that  act  were  required  to  contain  each  two  hun 
dred  and  thirty-two  grains  of  pure  gold,  or  two  hundred  and 
fifty-eight  grains  of  standard.  Three  years  later  congress 
enacted  that  the  standard  for  both  gold  and  silver  coins  should 
thereafter  be  such  that,  of  one  thousand  parts  by  weight,  nine 
hundred  should  be  of  pure  metal  and  one  hundred  of  alloy,  by 
which  the  gross  weight  of  the  dollar  was  reduced  to  four  hun 
dred  and  twelve  and  a  half  grains,  but  the  fineness  of  the  COILJS 
was  correspondingly  increased,  so  that  the  money  unit  re 
mained  of  the  same  intrinsic  value  as  under  the  original  act. 
Apply  that  rule  to  the  eagle,  and  it  will  be  seen  that  its  gross 
weight  would  be  increased,  as  it  was  in  fact  by  that  act,  but  it 
continued  to  contain,  as  under  the  preceding  act,  two  hundred 
and  thirty  grains  of  pure  gold  and  no  more,  showing  conclu 
sively  that  no  change  was  made  in  the  value  of  the  coins. 

Double  eagles  and  gold  dollars  were  authorized  to  be  "  struck 
and  coined  "  at  the  mint,  by  the  act  of  March  3,  1849,  but  the 
standard  established  for  other  gold  coins  was  not  changed,  and 
the  provision  was  that  the  new  coins  should  also  be  legal  ten 
der  for  their  coined  value. 


356  MONOPOLIES   AND   THE    PEOPLE. 

Fractional  silver  coins  were  somewhat  reduced  in  value  by 
the  act  of  February  21st,  1853,  but  the  same  act  provided  to 
the  effect  that  the  silver  coins  issued  in  conformity  thereto 
should  not  be  a  legal  tender  for  any  sum  exceeding  live  dollars, 
showing  that  the  purpose  of  the  enactment  was  to  prevent  the 
fractional  coins,  so  essential  fo*r  daily  use,  from  being  hoarded 
or  otherwise  withdrawn  from  circulation. 

Suppose  it  be  conceded,  however,  that  the  effect  of  that  act 
was  slightly  to  debase  the  fractional  silver  coins  struck  and 
coined  under  it,  still  it  is  quite  clear  that  the  amount  was  too 
inconsiderable  to  furnish  any  solid  argument  against  the  pro 
position  that  the  standard  of  value  in  the  United  States  was 
fixed  by  the  constitution,  and  that  such  was  the  understanding, 
both  of  the  government  and  of  the  people  of  the  United  States, 
for  a  period  of  more  than  seventy  years  from  the  time  the  con 
stitution  was  adopted  and  put  in  successful  operation  under 
the  laws  of  congress.  Throughout  that  period  the  value  of. 
the  money  unit  was  never  diminished,  and  it  remains  to-day, 
in  respect  to  value,  what  it  was  when  it  was  defined  in  the  act 
establishing  the  mint,  and  it  is  safe  to  affirm  that  no  one  of 
the  changes  made  in  the  other  coins,  except  perhaps  the  frac 
tional  silver  coins,  ever  extended  one  whit  beyond  the  appro 
priate  limit  of  constitutional  regulation. 

Treasury  notes,  called  United  States  notes,  were  authorized 
to  be  issued  by  the  act  of  February  25th,  1862,  to  the  amount 
of  $150,000,000,  on  the  credit  of  the  United  States,  but  they 
were  not  to  bear  interest,  and  were  to  be  made  payable  to 
bearer  at  the  treasury.  They  were  to  be  issued  by  the  secre 
tary  of  the  treasury,  and  the  further  provision  was  that  the 
notes  so  issued  should  be  lawful  money  and  legal  tender  in 
payment  of  all  debts,  public  and  private,  within  the  United 
States,  except  duties  on  imports  and  interest  upon  bonds  and 
notes  of  the  United  States,  which  the  act  provides  "  shall  be 
paid  in  coin."  Subsequent  acts  passed  for  a  similar  purpose 
also  except  "  certificates  of  indebtedness  and  of  deposit,"  but 
it  will  not  be  necessary  to  refer  specially  to  the  other  acts,  as 
the  history  of  that  legislation  is  fully  given  in  the  prior  decis 
ion  of  this  court  upon  the  same  subject. 

Strictly  examined  it  is  doubtful  whether  either  of  the  cases 


APPENDIX.  357 

before  the  court  present  any  such  questions  as  those  which 
have  been  discussed  in  the  opinion  of  the  majority  of  the  court 
just  read;  but  suppose  they  do,  which  is  not  admitted,  it  then 
becomes  necessary  to  inquire  in  the  first  place  whether  those 
questions  are  not  closed  by  the  recorded  decisions  of  this  court. 
Two  questions  are  examined  in  the  opinion  of  the  majority  of 
the  court :  (1.)  Whether  the  legal  tender  acts  are  constitu 
tional  as  to  contracts  made  before  the  acts  were  passed.  (2.) 
Whether  they  are  valid  if  applied  to  contracts  made  since  their 
passage. 

Assume  that  the  views  here  expressed  are  correct,  and  it 
matters  not  whether  the  contract  was  made  before  or  after  the 
act  of  congress  was  passed,  as  it  necessarily  follows  that  con 
gress  cannot,  under  any  circumstances,  make  paper  promises, 
of  any  kind,  a  legal  tender  in  payment  of  debts.  Prior  to  the 
decision  just  pronounced  it  is  conceded  that  the  second  ques 
tion  presented  in  the  record  was  never  determined  by  this 
court,  except  as  it  is  involved  in  the  first  question,  but  it  is  ad 
mitted  by  the  majority  of  the  court  that  the  first  question,  that 
is  the  question  whether  the  acts  under  consideration  are  con 
stitutional  as  to  contracts  made  before  their  passage,  was  fully 
presented  in  the  case  of  Hepburn  v.  Griswold,  and  that  the 
court  decided  that  an  act  of  congress  making  mere  paper  prom 
ises  to  pay  dollars  a  legal  tender  in  payment  of  debts  previ 
ously  contracted  is  unconstitutional  and  void. 

Admitted  or  not,  it  is  as  clear  as  anything  in  legal  decision 
can  be  that  the  judgment  of  the  court  in  that  case  controls  the 
first  question  presented  in  the  cases  before  the  court,  unless  it 
be  held  that  the  judgment  in  that  case  was  given  for  the  wrong 
party  and  that  the  opinion  given  by  the  chief  justice  ought  to 
be  overruled. 

Attempt  is  made  to  show  that  the  second  question  is  an  open 
one,  but  the  two,  in  my  judgment,  involve  the  same  consider 
ations,  as  congress  possesses  no  other  power  upon  the  subject 
than  that  which  is  derived  from  the  grant  to  coin  money,  reg 
ulate  the  value  thereof  and  of  foreign  coin.  By  that  remark 
it  is  not  meant  to  deny  the  proposition  that  congress  in  execut 
ing  the  express  grants  may  not  pass  all  laws  which  shall  be 
necessary  and  proper  for  carrying  the  same  into  execution,  as 


358  MONOPOLIES    AND   THE    PEOPLE. 

provided  in  another  clause  of  the  same  section  of  the  constitu 
tion.  Much  consideration  of  that  topic  is  not  required,  as  the 
discussion  was  pretty  nearly  exhausted  by  the  chief  justice  in 
the  case  of  Hepburn  v.  Griswold,  which  arose  under  the  same 
act  and  in  which  he  gave  the  opinion.  In  that  case  the  con 
tract  bore  date  prior  to  the  passage  of  the  law,  and  he  showed 
conclusively  that  it  could  never  be  necessary  and  proper,  within 
the  meaning  of  the  constitution,  that  congress,  in  executing 
any  of  the  express  powers,  should  pass  laws  to  compel  a  cred 
itor  to  accept  paper  promises  as  fulfilling  a  contract  for  the 
payment  of  money  expressed  in  dollars.  Obviously  the  decis 
ion  was  confined  to  the  case  before  the  court,  but  I  am  of  the 
opinion  that  the  same  rule  must  be  applied  whether  the  con 
tract  was  made  before  or  after  the  passage  of  the  law,  as  the 
contract  for  the  payment  of  money,  expressed  in  dollars,  is  a 
contract  to  make  the  payment  in  such  money  as  the  constitu 
tion  recognizes  and  establishes  as  a  standard  of  value.  Money 
values  can  no  more  be  measured  without  a  standard  of  value 
than  distances  without  a  standard  of  extent,  or  quantities  with 
out  a  standard  of  weights  or  measures,  and  it  is  as  necessary 
that  there  should  be  a  money  unit  as  that  there  should  be  a 
unit  of  extent,  or  of  weight,  or  quantity. 

Credit  currency,  whether  issued  by  the  states  or  the  United 
States,  or  by  private  corporations  or  individuals,  is  not  recog 
nized  by  the  constitution  as  the  standard  of  value,  nor  can  it 
be  made  such  by  any  law  which  congress  or  the  states  can  pass, 
as  the  laws  of  trade  are  stronger  than  any  legislative  enact 
ment.  Commerce  requires  a  standard  of  value,  and  all  expe 
rience  warrants  the  prediction  that  commerce  will  have  it, 
whether  the  United  States  agree  or  disagree,  as  the  laws  of 
commerce  in  that  respect  are  stronger  than  .the  laws  of  any 
single  nation  of  the  commercial  world.  Values  cannot  be 
measured  without  a  standard  any  more  than  time  or  duration, 
or  length,  surface,  or  solidity,  or  weight,  gravity,  or  quantity. 
Something  in  every  such  case  must  be  adopted  as  a  unit  which 
bears  a  known  relation  to  that  which  is  to  be  measured,  as  the 
dollar  for  values,  the  hour  for  time  or  duration,  the  foot  of 
twelve  inches  for  length,  the  yard  for  cloth  measure,  the  square 
foot  or  yard  for  surface,  the  cubic  foot  for  solidity,  the  gallon 


APPENDIX.  359 

for  liquids,  and  the  pound  for  weights ;  the  pound  avoirdupois 
being  used  in  most  commercial  transactions  and  the  pound  troy 
"  for  weighing  gold  and  silver  and  precious  stones,  except  dia 
monds." 

Unrestricted  power  "  to  fix  the  standard  of  weights  and 
measures  "  is  vested  in  congress,  but  until  recently  congress 
had  not  enacted  any  general  regulations  in  execution  of  that 
power.  Regulations  upon  the  subject  existed  in  the  states  at 
the  adoption  of  the  constitution,  the  same  as  those  which  pre 
vailed  at  that  time  in  the  parent  country,  and  Judge  Story  says 
that  the  understanding  was  that  those  regulations  remained 
in  full  force,  and  that  the  states,  until  congress  should  leg 
islate,  possessed  the  power  to  fix  their  own  weights  and  meas 
ures. 

Power  to  coin  money  and  regulate  the  value  of  domestic  and 
foreign  coin  was  vested  in  the  national  government  to  produce 
uniformity  of  value  and  to  prevent  the  embarrassments  of  a 
perpetually  fluctuating  and  variable  currency. 

Money,  says  the  same  commentator,  is  the  universal  medium 
or  common  standard  by  a  comparison  with  which  the  value  of  all 
merchandise  may  be  ascertained ;  and  he  also  speaks  of  it  as 
"  a  sign  which  represents  the  respective  values  of  all  other 
commodities."  Such  a  power,  that  is  the  power  to  coin 
money,  he  adds,  is  one  of  the  ordinary  prerogatives  of  sover 
eignty,  and  is  almost  universally  exercised  in  order  to  preserve 
a  proper  circulation  of  good  coin,  of  a  known  value,  in  the 
home  market. 

Interests  of  such  magnitude  and  pervading  importance  as 
those  involved  in  providing  for  a  uniform  standard  of  value; 
throughout  the  Union  were  manifestly  entitled  to  the  protection 
of  the  national  authority,  and  in  view  of  the  evils  experienced 
for  the  want  of  such  a  standard  during  the  war  of  the  revolu 
tion,  when  the  country  was  inundated  with  floods  of  depre 
ciated  paper,  the  members  of  the  convention  who  framed  the 
constitution  did  not  hesitate  to  confide  the  power  to  congress, 
not  only  to  coin  money  and  regulate  the  value  thereof,  but  also 
the  power  to  regulate  the  value  of  foreign  coin,  which  was  de 
nied  to  the  congress  of  the  confederation. 

Influenced  by  these  considerations  and  others  expressed  in 


360  MONOPOLIES   AND   THE    PEOPLE. 

the  opinion  of  the  chief  justice,  this  court  decided  in  the  case 
referred  to,  that  the  act  of  congress  making  the  notes  in  ques 
tion  "  lawful  money  and  a  legal  tender  in  payment  of  debts  " 
could  not  be  vindicated  as  necessary  and  proper  means  for  car 
rying  into  effect  the  power  vested  in  congress  to  coin  money 
and  regulate  the  value  thereof,  or  any  other  express  power 
vested  in  congress  under  the  constitution.  Unless  that  case, 
therefore,  is  overruled,  it  is  clear,  in  my  judgment,  that  both 
the  cases  before  the  court  are  controlled  by  that  decision. 
Controversies  determined  by  the  supreme  court  are  finally  and 
conclusively  settled,  as  the  decisions  are  numerous  that  the 
court  cannot  review  and  reverse  their  own  judgments. 

But  where  the  parties  are  different,  it  is  said  the  court,  in  a 
subsequent  case,  may  overrule  a  former  decision,  and  it  must 
be  admitted  that  the  proposition,  in  a  technical  point  of  view, 
is  correct.  Such  examples  are  to  be  found  in  the  reported  de 
cisions  of  the  court,  but  they  are  not  numerous,  and  it  seems 
clear  that  the  number  ought  never  to  be  increased,  especially 
in  a  matter  of  so  much  importance,  unless  the  error  is  plain 
and  upon  the  clearest  convictions  of  judicial  duty. 

Judgment  was  rendered  for  the  plaintiff  in  that  case  on  the 
17th  of  September,  1864,  in  the  highest  court  of  the  state,  and 
on  the  23d  of  June  in  the  succeeding  year  the  defendants  sued 
out  a  writ  ot  error,  and  removed  the  cause  into  this  court  for 
re-examination.  Under  the  regular  call  of  the  docket,  the  case 
was  first  argued  at  the  December  term,  1867,  but  at  the  sug 
gestion  of  the  attorney  general  an  order  was  passed  that  it  be 
re-argued,  and  the  case  was  accordingly  continued  for  that 
purpose.  Able  counsel  appeared  at  the  next  term,  and  it  was 
again  elaborately  argued  on  both  sides.  Four  or  five  other 
cases  were  also  on  the  calendar,  supposed  at  that  time  to  in 
volve  the  same  constitutional  questions,  and  those  cases  were 
also  argued,  bringing  to  the  aid  of  the  court  an  unusual  array  of 
counsel  of  great  learning  and  eminent  abilities.  Investigation 
and  deliberation  followed,  authorities  were  examined,  and  oft- 
repeated  consultations  among  the  justices  ensued,  and  the  case 
was  held  under  advisement  as  long  as  necessary  to  the  fullest 
examination  by  all  the  justices  of  the  court,  before  the  opinion 
of  the  court  was  delivered.  By  law,  the  supreme  court  at 


APPENDIX.  361 

that  time  consisted  of  the  chief  justice  and  seven  associate  jus 
tices,  the  act  of  congress  having  provided  that  no  vacancy  in 
the  office  of  associate  justice  should  be  filled  until  the  number 
should  be  reduced  to  six.  Five  of  the  number,  including  the 
chief  justice,  concurred  in  the  opinion  in  that  case,  and  the 
judgment  of  the  state  court  was  affirmed,  three  of  the  associate 
justices  dissenting.  Since  that  time  one  of  the  justices  who 
concurred  in  that  opinion  of  the  court  has  resigned,  and  con 
gress  having  increased  the  number  of  associate  justices  to 
eight,  the  two  cases  before  the  court  have  been  argued,  and 
the  result  is  that  the  opinion  delivered  in  the  former  case  is 
overruled,  five  justices  concurring  in  the  present  opinion  and 
four  dissenting.  Five  justices  concurred  in  the  first  opinion, 
and  five  have  overruled  it.  Persuaded  that,  the  first  opinion 
was  right,  for  the  reasons  already  assigned,  it  is  not  possible 
that  I  should  concur  in  the  second,  even  if  it  were  true  that  no 
other  reasons  of  any  weight  could  be  given  in  support  of  the 
judgment  in  the  first  case,  and  that  the  conclusion  there 
reached  must  stand  or  fall  without  any  other  support.  Many 
other  reasons,  however,  may  be  invoked  to  fortify  that  conclu 
sion,  equally  persuasive  and  convincing  with  those  to  which 
reference  has  been  made. 

All  writers  upon  political  economy  agree  that  money  is  the 
universal  standard  of  value,  and  the  measure  of  exchange, 
foreign  and  domestic,  and  that  the  power  to  coin  and  regulate 
the  value  of  money  is  an  essential  attribute  of  national 
sovereignty.  Goods  and  chattels  were  directly  bartered, 
one  for  another,  when  the  division  of  labor  was  first  introduced, 
but  gold  and  silver  were  adopted  to  serve  the  purpose  of  ex 
change  by  the  tacit  concurrence  of  all  nations  at  a  very  early 
period  in  the  history  of  commercial  transactions.  Commodi 
ties  of  various  kinds  were  used  as  money  at  different  periods  in 
different  countries,  but  experience  soon  showed  the  commer 
cial  nations  that  gold  and  silver  embodied  the  qualities  desir 
able  in  money  in  a  much  greater  degree  than  any  other  known 
commodity  or  substance.  Daily  experience  shows  the  truth  of 
that  proposition,  and  supersedes  the  necessity  of  any  remarks 
to  enforce  it,  as  all  admit  that  a  commodity  to  serve  as  a  stand 
ard  of  value  and  a  medim  of  exchange  must  be  easily  divisible 
45 


362  MONOPOLIES    AND    THE    PEOPLE. 

into  small  portions ;  that  it  must  admit  of  being  kept  for  an 
indefinite  period  without  deteriorating ;  that  it  must  possess 
great  value  in  small  bulk,  and  be  capable  of  being  easily  trans 
ported  from  place  to  place ;  that  a  given  denomination  in  money 
should  always  be  equal  in  weight  arid  quality,  or  fineness,  to 
other  pieces  of  money  of  the  same  denomination,  and  that  its 
value  should  be  the  same  or  as  little  subject  to  variation  as 
possible.  Such  qualities,  all  agree,  are  united  in  a  much 
greater  degree  in  gold  and  silver  than  in  any  other  known 
commodity,  which  was  as  well  known  to  the  members  of  the 
convention  who  framed  the  constitution  as  to  any  body  of  men 
since  assembled,  and  intrusted  to  any  extent  with  the  public 
affairs.  They  not  only  knew  that  the  money  of  the  commer 
cial  world  was  gold  and  silver,  but  they  also  knew,  from  bitter 
experience,  that  paper  promises,  whether  issued  by  the  states 
or  the  United  States,  were  utterly  worthless  as  a  standard  of 
value  for  any  practical  purpose. 

Evidence  of  the  truth  of  these  remarks,  of  the  most  con 
vincing  character  is  to  be  found  in  the  published  proceedings 
of  that  convention.  Debate  upon  the  subject  first  arose  when 
an  amendment  was  proposed  to  prohibit  the  states  from  emit 
ting  bills  of  credit  or  making  anything  but  gold  and  silver  coin 
a  tender  in  payment  of  debts,  and  from  the  character  of  that 
debate,  and  the  vote  on  the  amendment,  it  became  apparent 
that  paper  money  had  but  few,  if  any  friends  in  the  convention. 
Article  seven  of  the  draft  of  the  constituion  as  reported  to  the 
convention,  contained  the  clause,  "  and  emit  bills  on  the  credit 
of  the  United  States,'7  appended  to  the  grant  of  power  vested 
in  congress  to  borrow  money,  and  it  was  on  the  motion  to 
strike  out  that  clause  that  the  principal  discussion  in  respect 
to  paper  money  took  place.  Mr.  Madison  inquired  if  it  would 
not  be  sufficient  to  prohibit  the  making  such  bills  a  tender,  as 
that  would  remove  the  temptation  to  emit  them  with  unjust 
views.  Promissory  notes,  he  said,  in  that  shape,  that  is  when 
not  a  tender,  "  may  in  some  emergencies  be  best."  Some 
were  willing  to  acquiesce  in  the  modification  suggested  by  Mr. 
Madison,  but  Mr.  Morris,  who  submitted  the  motion,  objected, 
insisting  that  if  the  motion  prevailed  there  would  still  be  room 
left  for  the  notes  of  a  responsible  minister,  which,  as  he  said, 


APPENDIX.  868 

"  would  do  all  the  good  without  the  mischief/'  Decided  ob 
jections  were  advanced  by  Mr.  Ellsworth,  who  said  he  thought 
the  moment  a  favorable  one  "to  shut  and  bar  the  door  against 
paper  money ; "  and  others  expressed  their  opposition  to  the 
clause  in  equally  decisive  language,  even  saying  that  they  would 
sooner  see  the  whole  plan  rejected  than  retain  the  three  words, 
"  and  emit  bills."  Suffice  it  to  say,  without  reproducing  the 
discussion,  that  the  motion  prevailed — nine  states  to  two— and 
the  clause  was  stricken  out  and  no  attempt  was  ever  made  to 
restore  it.  Paper  money,  as  legal  tender,  had  few  or  no  advo 
cates  in  the  convention,  and  it  never  had  more  than  one  open 
advocate  throughout  the  period  the  constitution  was  under  dis 
cussion,  either  in  the  convention  which  framed  it,  or  in  the  con 
ventions  of  the  states  where  it  was  ratified.  Virginia  voted  in  the 
affirmative  on  the  motion  to  strike  out  that  clause,  Mr.  Madi 
son  being  satisfied  that  if  the  motion  prevailed  it  would  not 
have  the  effect  to  disable  the  government  from  the  use  of 
treasury  notes,  and  being  himself  in  favor  of  cutting  "  off  the 
pretext  for  a  paper  currrency,  and  particularly  for  making  the  bills  a 
tender,  either  for  public  or  private  debts.''  When  the  draft  for  the 
constitution  was  reported  the  clause  prohibiting  the  states 
from  making  anything  but  gold  and  silver  a  tender  in  payment 
of  debts  contained  an  exception,  "  in  case  congress  consented," 
but  the  convention  struck  out  the  exception  and  made  the  pro 
hibition  absolute,  one  of  the  members  remarking  that  it  was  a 
favorable  moment  to  crush  out  paper  money,  and  all  or  nearly 
all  of  the  convention  seemed  to  concur  in  the  sentiment. 

Contemporaneous  acts  are  certainly  evidence  of  intention, 
and  if  so,  it  is  difficult  to  see  what  more  is  needed  to  show 
that  the  members  of  that  convention  intended  to  withhold 
from  the  states,  and  from  the  United  States,  all  power  to  make 
anything  but  gold  and  silver  a  standard  of  value,  or  a  tender 
in  payment  of  debts.  Equally  decisive  proof  to  the  same 
effect  is  found  in  the  debates  which  subsequently  occurred  in 
the  conventions  of  the  several  states,  to  which  the  constitution, 
as  adopted,  was  submitted  for  ratification.  Mr.  Martin 
thought  that  the  states  ought  not  to  be  totally  deprived  of  the 
right  to  emit  bills  of  credit,  but  he  says  "  that  the  convention 


364  MONOPOLIES    AND    THE    PEOPLE. 

was  so  smitten  with  the  paper  money  dread  that  they  insisted 
that  the  prohibition  should  be  absolute." 

Currency  is  a  word  much  more  comprehensive  than  th« 
word  money,  as  it  may  include  bank  bills  and  even  bills  of  ex 
change  as  well  as  coins  of  gold  and  silver,  but  the  word 
money,  as  employed  in  the  grant  of  power  under  considera 
tion,  means  the  coins  of  gold  and  silver,  fabricated  and  stamped 
as  required  by  law,  which,  by  virtue  of  their  intrinsic  value, 
as  universally  acknowledged,  and  their  official  origin,  become 
the  medium  of  exchange  and  the  standard  by  which  all  other 
values  are  expressed  and  discharged.  Support  to  the  proposi 
tion  that  the  word  money,  as  employed  in  that  clause,  was  in 
tended  to  be  used  in  the  sense  here  supposed  is  also  derived 
from  the  language  employed  in  certain  numbers  of  the  Federal 
ist,  which,  as  is  well  known,  were  written  and  published  during 
the  period  the  question  whether  the  states  would  ratify  the 
constitution  was  pending  in  their  several  conventions.  Such 
men  as  the  writers  of  those  essays  never  could  have  employed 
such  language  if  they  had  entertained  the  remotest  idea  that 
congress  possessed  the  power  to  make  paper  promises  a  legal 
tender. 

Like  support  is  also  derived  from  the  language  of  Mr.  Ham 
ilton  in  his  celebrated  report  recommending  the  incorporation 
of  a  national  bank.  He  first  states  the  objection  to  the  pro 
posed  measure,  that  banks  tend  to  banish  the  gold  and  silver 
of  the  country ;  and  secondly  he  gives  the  answer  to  that  ob 
jection  made  by  the  advocates  of  the  bank,  that  it  is  immate 
rial  what  serves  the  purpose  of  money,  and  then  says  that  the 
answer  is  not  entirely  satisfactory,  as  the  permanent  increase 
or  decrease  of  the  precious  metals  in  a  country  can  hardly  ever 
be  a  matter  of  indifference.  "  As  the  commodity  taken  in  lieu 
of  every  other,  it  (coin)  is  a  species  of  the  most  effective  wealth, 
and  as  the  money  of  the  world  it  is  of  great  concern  to  the 
state  that  it  possesses  a  sufficiency  of  it  to  face  any  demands 
which  the  protection  of  its  external  interests  may  create.''  He 
favored  the  incorporation  of  a  national  bank,  with  power  to 
issue  bills  and  notes  payable  on  demand  in  gold  and  silver,  but  he 
expressed  himself  as  utterly  opposed  to  paper  emissions  by  the 
United  States,  characterizing  them  as  so  liable  to  abuse  and 


APPENDIX.  365 

even  so  certain  of  being  abused  that  the  government  ought 
never  to  trust  itself  "  with  the  use  of  so  seducing  and  danger 
ous  an  element."  Opposed  as  he  was  to  paper  emissions  by 
the  United  States,  under  any  circumstances,  it  is  past  belief 
that  h<^  could  ever  have  concurred  in  the  proposition  to  make 
such  emissions  a  tender  in  payment  of  debts,  either  as  a  mem 
ber  of  the  convention  which  framed  the  constitution  or  as  the 
head  of  the  treasury  department.  Treasury  notes,  however, 
have  repeatedly  been  authorized  by  congress,  commencing 
with  the  act  of  30th  of  June,  1812,  but  it  was  never  supposed 
before  the  time  when  the  several  acts  in  question  were  passed 
that  congress  could  make  such  notes  a  legal  tender  in  payment 
of  debts.  Such  notes,  it  was  enacted,  should  be  received  in 
payment  of  all  duties  and  taxes  laid,  and  in  payment  for  public 
lands  sold  by  the  Federal  authority.  Provision  was  also  made 
in  most  or  all  of  the  acts  that  the  secretary  of  the  treasury, 
with  the  approbation  of  the  president,  might  cause  treasury 
notes  to  be  issued,  at  the  par  value  thereof,  in  payment  of  ser 
vices,  of  supplies,  or  of  debts  for  which  the  United  States  were 
or  might  be  answerable  by  law,  to  such  person  or  persons  as 
should  be  willing  to  accept  the  same  in  payment,  but  it  never  oc- 
cured  to  the  legislators  of  that  day  that  such  notes  could  be 
made  a  legal  tender  in  discharge  of  such  indebtedness,  or  that 
the  public  creditor  could  be  compelled  to  accept  them  in  pay 
ment  of  his  just  demands. 

Financial  embarrassments,  second  only  in  their  disastrous 
consequences  to  those  which  preceded  the  adoption  of  the  con 
stitution,  arose  towards  the  close  of  the  last  war  with  Great 
Britain,  and  it  is  matter  of  history  that  those  embarrassments 
were  too  great  and  pervading  to  be  overcome  by  the  use  of 
treasury  notes  or  any  other  paper  emissions  without  a  specie 
basis.  Expedients  of  various  kinds  were  suggested,  but  it 
never  occured  either  to  the  executive  or  to  congress  that  a 
remedy  could  be  found  by  making  treasury  notes,  as  then  au 
thorized,  a  legal  tender,  and  the  result  was  that  the  second 
bank  of  the,  United  States  was  incorporated.  Paper  currency, 
it  may  be  said,  was  authorized  by  that  act,  which  is  undoubt 
edly  true ;  and  it  is  also  true  that  the  bills  or  notes  of  the  bank 
were  made  receivable  in  all  payments  to  the  United  States,  if 


866  MONOPOLIES   AND   THE    PEOPLE. 

the  same  were  at  the  time  payable  on  demand,  but  the  act  pro 
vided  that  the  corporation  should  not  refuse,  under  a  heavy 
penalty,  the  payment  in  gold  and  silver,  of  any  of  its  notes, 
bills,  or  obligations,  nor  of  any  moneys  received  upon  deposit 
in  the  bank  or  in  any  of  its  offices  of  discount  and  deposit. 

Serious  attempt  is  made,  strange  to  say,  to  fortify  the  prop 
osition  that  the  acts  in  question  are  constitutional  from  the 
fact  that  congress,  in  providing  for  the  use  of  treasury  notes, 
and  in  granting  the  charters  to  the  respective  national  banks, 
made  the  notes  and  bills  receivable  in  payment  of  duties  and 
taxes,  but  the  answer  to  the  suggestion  is  so  obvious  that  it  is 
hardly  necessary  to  pause  to  suggest  its  refutation.  Creditors 
may  exact  gold  and  silver  or  they  may  waive  the  right  to  re 
quire  such  money,  and  accept  credit  currency,  or  commodities, 
other  than  gold  and  silver,  and  the  United  States,  as  creditors, 
or  in  the  exercise  of  their  express  power  to  lay  and  collect 
taxes,  duties,  imposts,  and  excises,  may,  if  they  see  fit,  accept 
the  treasury  notes  or  bank  bills  in  such  payments  as  substi 
tutes  for  the  constitutional  currency.  Further  discussion  of 
the  proposition  is  unnecessary,  as  it  is  plainly  destitute  of  any 
merit  whatever. 

Resort  was  also  had  to  treasury  notes  in  the  revulsion  of 
1837,  and  during  the  war  with  Mexico,  and  also  in  the  great 
revulsion  of  1857,  but  the  new  theory  that  congress  could  make 
treasury  notes  a  legal  tender  was  not  even  suggested,  either  by 
the  president  or  by  any  member  of  congress. 

Seventy  years  are  included  in  this  review,  even  if  the  com 
putation  is  only  carried  back  to  the  passage  of  the  act  estab 
lishing  the  mint,  and  it  is  clear  that  there  is  no  trace  of  any 
act,  executive  or  legislative,  within  that  period,  which  affords 
the  slightest  support  to  the  new  constitutional  theory  that  con 
gress  can  by  law  constitute  paper  emissions  a  tender  in  pay 
ment  of  debts.  Even  Washington,  the  father  of  our  country, 
refused  to  accept  paper  money  in  payment  of  debts,  contracted 
before  the  war  of  independence,  and  the  proof  is  full  to  the 
point  that  Hamilton,  as  well  as  Jefferson  and  Madison,  was  op 
posed  to  paper  emissions  by  the  national  authority. 

Sufficient  also  is  recorded  in  the  reports  of  the  decisions  of 
this  court  to  show  that  the  court,  from  the  organization  of  the 


APPENDIX.  367 

judicial  system  to  the  day  when  the  judgments  in  the  cases  be 
fore  the  court  were  announced,  held  opinions  utterly  opposed 
to  such  a  construction  of  the  constitution  as  would  authorize 
congress  to  make  paper  promises  a  legal  tender  as  between 
debtor  and  creditor.  Throughout  that  period  the  doctrine  of 
the  court  has  been,  and  still  is,  unless  the  opinion  of  the  court 
just  read  constitutes  an  exception,  that  the  government  of  the 
United  States,  as  ordained  and  established  by  the  constitution, 
is  a  government  of  enumerated  powers ;  that  all  the  powers 
not  delegated  to  the  United  States  by  the  constitution,  nor  pro 
hibited  by  it  to  the  states,  are  reserved  to  the  states  respect 
ively  or  to  the  people ;  that  every  power  vested  in  the  Federal 
government  under  the  constitution  is  in  its  nature  sovereign, 
and  that  congress  may  pass  all  laws  necessary  and  proper  to 
carry  the  same  into  execution,  or,  in  other  words,  that  the 
power  being  sovereign  includes,  by  force  of  the  term,  the 
requisite  means,  fairly  applicable  to  the  attainment  of  the  con 
templated  end,  which  are  not  precluded  by  restrictions  or  ex 
ceptions  expressed  or  necessarily  implied,  and  not  contrary  to 
the  essential  ends  of  political  society. 

Definitions  slightly  different  have  been  given  by  different 
jurists  to  the  words  "necessary  and  proper,"  employed  in  the 
clause  of  the  constitution  conferring  upon  congress  the  power 
to  pass  laws  for  carrying  the  express  grants  of  power  into  ex 
ecution,  but  no  one  ever  pretended  that  a  construction  or  defi 
nition  could  be  sustained  that  the  general  clause  would  author 
ize  the  employment  of  such  means  in  the  execution  of  one 
express  grant  as  would  practically  nullify  another  or  render 
another  utterly  nugatory.  Circumstances  made  it  necessary 
that  Mr.  Hamilton  should  examine  that  phrase  at  a  very  early 
period  after  the  constitution  was  adopted,  and  the  definition 
he  gave  to  it  is  as  follows :  "All  the  means  requisite  and  fairly 
applicable  to  the  attainment  of  the  end  of  such  power  which 
are  not  precluded  by  restrictions  and  exceptions  specified  in 
the  constitution,  and  not  contrary  to  the  essential  ends  of  po 
litical  society."  Twenty-five  years  later  the  question  was  exam 
ined  by  the  supreme  court  and  authoritatively  settled,  the  chief 
justice  giving  the  opinion.  His  words  were  :  "Let  the  end  be 
legitimate,  let  it  be  within  the  scope  of  the  constitution,  and 


368  MONOPOLIES   AND   THE    PEOPLE. 

all  means  which  are  appropriate,  which  are  plainly  adapted  to 
that  end,  and  which  are  not  prohibited  but  consistent  with  the 
letter  and  spirit  of  the  constitution,  are  constitutional." 

Substantially  the  same  definition  was  adopted  by  the  present 
chief  justice  in  the  former  case,  in  which  he  gave  the  opinion 
of  the  court,  and  there  is  nothing  contained  in  the  Federal  re 
ports  giving  the  slightest  sanction  to  any  broader  definition  of 
those  words.  Take  the  definition  given  by  Mr.  Hamilton, 
which,  perhaps,  is  the  broadest,  if  there  is  any  difference,  and 
still  it  is  obvious  that  it  would  give  no  countenance  whatever 
to  the  theory  that  congress,  in  passing  a  law  to  execute  one 
express  grant  of  the  constitution,  could  authorize  means  which 
would  nullify  another  express  grant,  or  render  it  nugatory  for 
the  attainment  of  the  end  which  the  framers  of  the  constitution 
intended  it  should  accomplish. 

Authority  to  coin  money  was  vested  in  congress  to  provide 
a  permanent  national  standard  of  value,  everywhere  the  same, 
and  subject  to  no  variation  except  what  congress  shall  make 
under  the  power  to  regulate  the  value  thereof,  and  it  is  not 
possible  to  affirm,  with  any  hope  that  the  utterance  will  avail 
in  the  argument,  that  the  power  to  coin  money  is  not  an  ex 
press  power,  and  if  those  premises  are  conceded  it  cannot  be 
shown  that  congress  can  so  expand  any  other  express  power 
by  implication  as  to  nullify  or  defeat  the  great  purposes  which 
the  power  to  coin  money  and  establish  a  standard  of  value  was 
intended  to  accomplish. 

Government  notes,  it  is  conceded,  may  be  issued  as  a  means 
of  borrowing  money,  because  the  act  of  issuing  the  notes  may 
be,  and  often  is,  a  requisite  means  to  execute  the  granted  power, 
and  being  fairly  applicable  to  the  attainment  of  the  end,  the 
notes,  as  means,  may  be  employed,  as  they  are  not  precluded 
by  any  restrictions  or  exceptions,  and  are  not  repugnant  to  any 
other  express  grant  contained  in  the  constitution.  Light 
houses,  buoys,  and  beacons  may  be  erected  under  the  power  to 
regulate  commerce,  but  congress  cannot  authorize  an  officer 
of  the  government  to  take  private  property  for  such  a  purpose 
without  just  compensation,  as  the  exercise  of  such  a  power 
would  be  repugnant  to  the  fifth  amendment.  Power  to  lay  and 
collect  taxes  is  conferred  upon  congress,  but  the  congress  can- 


APPENDIX.  369 

not  tax  the  salaries  of  the  state  judges,  as  the  exercise  of  such 
a  power  is  incompatible  with  the  admitted  power  of  the  states 
to  create  courts,  appoint  judges,  and  provide  for  their  compen 
sation. 

Congress  may  also  impose  duties,  imposts,  and  excises  to 
pay  the  debts  and  provide  for  the  common  defence  and  general 
welfare,  but  the  congress  cannot  lay  any  tax  or  duty  on  arti 
cles  exported  from  any  state,  nor  can  congress  give  any  prefer 
ence  by  any  regulation  of  commerce  or  revenue  to  the  ports 
of  one  state  over  those  of  another,  as  the  exercise  of  any  such 
power  is  prohibited  by  the  constitution.  Exclusive  power  is 
vested  in  congress  to  declare  war,  to  raise  and  support  armies, 
to  provide  and  maintain  a  navy,  and  to  make  rules  for  the  gov 
ernment  and  regulation  of  the  land  and  naval  forces.  Appro 
priations  to  execute  those  powers  may  be  made  by  congress, 
but  no  appropriations  of  money  to  that  use  can  be  made  for  a 
longer  term  than  two  years,  as  an  appropriation  tor  a  longer 
term  is  expressly  prohibited  by  the  same  clause  which  confers 
the  power  to  raise  and  support  armies.  By  virtue  of  those 
grants  of  power  congress  may  erect  forts  and  magazines,  may 
construct  navy-yards  and  dock-yards,  manufacture  arms  arid 
munitions  of  war,  and  may  establish  depots  and  other  needful 
buildings  for  their  preservation,  but  the  congress  cannot  take 
private  property  for  that  purpose  without  making  compensa 
tion  to  the  owner,  as  the  constitution  provides  that  private 
property  shall  not  be  taken  for  public  use  without  j  ust  com 
pensation. 

Legislative  power  under  the  constitution  can  never  be  right 
fully  extended  to  the  exercise  of  a  power  not  granted  nor  to 
that  which  is  prohibited,  and  it  makes  no  difference  whether 
the  prohibition  is  express  or  implied,  as  an  implied  prohibition, 
when  once  ascertained,  is  as  effectual  to  negative  the  right  to 
legislate  as  one  that  is  expressed;  the  rule  being  that  congress, 
in  passing  laws  to  carry  the  express  powers  granted  into  exe 
cution,  cannot  select  any  means  as  requisite  for  that  purpose 
or  as  fairly  applicable  to  the  attainment  of  the  end,  which  are 
precluded  by  restrictions  or  exceptions  contained  in  the  consti 
tution,  or  which  are  contrary  to  the  essential  ends  of  political 
society. 
46 


370  MONOPOLIES   AND   THE    PEOPLE. 

Concede  these  premises,  and  it  follows  that  the  acts  of  con 
gress  in  question  cannot  be  regarded  as  valid  unless  it  can  be 
held  that  the  power  to  make  paper  emissions  a  legal  tender  in 
payment  of  debts  can  properly  be  implied  from  the  power  to 
coin  money,  and  that  such  emissions,  when  enforced  by  such 
a  provision,  become  the  legal  standard  of  value  under  the  con 
stitution.  Extended  discussion  of  the  first  branch  of  the  prop 
osition  would  seem  to  be  unnecessary,  as  the  dissenting  jus 
tices  in  the  former  case  abandoned  that  point  and  frankly 
stated  in  the  dissenting  opinion  delivered  that  they  were  not 
able  to  see  in  those  clauses,  "  standing  alone,  a  sufficient  war 
rant  for  the  exercise  of  this  power."  Through  their  organ  on 
the  occasion  they  referred  to  the  power  to  declare  war,  to  sup 
press  insurrection,  to  raise  and  support  armies,  to  provide  and 
maintain  a  navy,  to  borrow  money,  to  pay  the  debts  of  the 
Union,  and  to  provide  for  the  common  defence  and  general 
welfare,  as  grants  of  power  conferred  in  separate  clauses  of 
the  constitution.  Reference  was  then  made  in  very  appropri 
ate  terms  to  the  exigencies  of  the  treasury  during  that  period 
and  the  conclusion  reached,  though  expressed  interrogatively, 
appears  to  be  that  the  provision  making  the  notes  a  legal  ten 
der  was  a  necessary  and  proper  one  as  conducing  "  towards 
the  purpose  of  borrowing  money,  of  paying  debts,  of  raising 
armies,  of  suppressing  insurrection,"  or,  as  expressed  in  an 
other  part  of  the  same  opinion,  the  provision  was  regarded  as 
"  necessary  and  proper  to  enable  the  government  to  borrow 
money  to  carry  on  the  war." 

Suggestions  or  intimations  are  made  in  one  or  more  of  the 
opinions  given  in  the  state  courts  that  the  power  assumed  by 
congress  may  be  vindicated  as  properly  implied  from  the  power 
to  coin  money,  but  inasmuch  as  that  assumption  was  not  the 
ground  of  the  dissent  in  the  former  case,  and  as  the  court  is 
not  referred  to  any  case  where  a  court  affirming  the  validity  of 
the  acts  of  congress  in  question  has  ventured  to  rest  their  de 
cision  upon  that  theory,  it  does  not  appear  to  be  necessary  to 
protract  the  discussion  upon  that  point. 

Such  notes  are  not  declared  in  the  acts  of  congress  to  be  a 
standard  of  value,  and  if  they  were  the  provision  would  be  as 
powerless  to  impart  that  quality  to  the  notes  as  were  the  pro- 


APPENDIX.  871 

cesses  of  the  alchemist  to  convert  chalk  into  gold,  or  the  con 
trivances  of  the  mechanic  to  organize  a  machine  and  give  it 
perpetual  motion.  Gold  and  silver  were  adopted  as  the  stand 
ard  of  value,  even  before  civil  governments  were  organized, 
and  they  have  always  "been  regarded  as  such  to  the  present 
time,  and  it  is  safe  to  affirm  that  they  will  continue  to  be  such 
by  universal  consent,  in  spite  of  legislative  enactments  and  of 
judicial  decisions.  Treasury  notes,  or  the  notes  in  question, 
called  by  what  name  they  may  be,  never  performed  that  office, 
even  for  a  day,  arid  it  may  be  added  that  neither  legislative 
enactments  nor  judicial  decisions  can  compel  the  commercial 
world  to  accept  paper  emissions  of  any  kind  as  the  standard 
of  value  by  which  all  other  values  are  to  be  measured.  Noth 
ing  but  money  will  in  fact  perform  that  office,  arid  it  is  clear 
that  neither  legislative  enactments  nor  judicial  decisions  can 
perform  commercial  impossibilities.  Commodities  undoubt 
edly  may  be  exchanged  as  matter  of  barter,  or  the  seller  may  ac 
cept  paper  promises  instead  of  money,  but  it  is  nevertheless  true, 
as  stated  by  Mr.  Huskisson,that  money  is  not  only  the  common 
measure  and  common  representative  of  all  other  commodities,  but 
also  the  common  arid  universal  equivalent.  Whoever  buys,  gives, 
whoever  sells,  receives  such  a  quantity  of  pure  gold  or  silver 
as  is  equivalent  to  the  article  bought  or  sold ;  or  if  he  gives 
or  receives  paper  instead  of  money,  he  gives  and  receives  that 
which  is  valuable  only  as  it  stipulates  the  payment  of  a  given 
quantity  of  gold  or  silver. 

"  Most  unquestionably,"  said  Mr.  Webster,  "  there  is  no 
legal  tender,  and  there  can  be  no  legal  tender,  in  this  country, 
under  the  authority  of  this  government,  or  any  other,  but  gold 
and  silver.  *  *  This  is  a  constitutional  principle,  perfectly 
plain  and  of  the  very  highest  importance."  He  admitted  that 
no  such  express  prohibition  was  contained  in  the  constitution, 
and  then  proceeded  to  say  :  "As  Congress  has  no  power 
granted  to  it  in  this  respect  but  to  coin  money  and  to  regulate 
the  value  of  foreign  coins,  it  clearly  has  no  power  to  substitute 
paper  or  anything  else  for  coin  as  a  tender  in  payment  of  debts 
and  in  discharge  of  contracts,"  adding  that  "  Congress  has  ex 
ercised  the  power  fully  in  both  its  branches.  It  has  coined 
money  and  still  coins  it,  it  has  regulated  the  value  of  foreign 


372  MONOPOLIES   AND   THE    PEOPLE. 

coins  and  still  regulates  their  value.  The  legal  tender,  there 
fore,  THE  CONSTITUTIONAL  STANDARD  OF  VALUE,  IS  ESTABLISHED 

AND  CANNOT  BE  OVERTHROWN."  Beyond  peradventure  he  was 
of  the  opinion  that  gold  and  silver,  at  rates  fixed  by  congress, 
constituted  the  legal  standard  of  value,  and  that  neither  con 
gress  nor  the  states  had  authority  to  establish  any  other  stand 
ard  in  its  place. 

Views  equally  decisive  have  been  expressed  by  this  court  in 
a  case  where  the  remarks  were  pertinent  to  the  question  pre 
sented  for  decision.  Certain  questions  were  certified  here 
which  arose  in  the  circuit  court  in  the  trial  of  an  indictment 
in  which  the  defendant  was  charged  with  having  brought  into 
the  United  States  from  a  foreign  place,  with  intent  to  pass, 
utter,  publish,  and  sell  certain  false,  forged,  and  counterfeit 
coins,  made,  forged,  and  counterfeited  in  the  resemblance  and 
similitude  of  the  coins  struck  at  the  mint.  Doubts  were  raised 
at  the  trial  whether  congress  had  the  power  to  pass  the  law 
on  which  the  indictment  was  founded.  Objection  was  made 
that  the  acts  charged  were  only  a  fraud  in  traffic,  and,  as  such, 
were  punishable,  if  at  all,  under  the  state  law.  Responsive  to 
that  suggestion  the  court  say  that  the  provisions  of  the  section 
"  appertain  rather  to  the  execution  of  an  important  trust  in 
vested  by  the  constitution,  and  to  the  obligation  to  fulfil  that 
trust  on  the  part  of  the  government,  namely,  the  trust  and  the 
duty  of  creating  and  maintaining  a  uniform  and  pure  metallic 
standard  of  value  throughout  the  Union  ;  that  the  power  of  coin 
ing  money  and  of  regulating  its  value  was  delegated  to  con 
gress  by  the  constitution  for  the  very  purpose  of  creating  and 
preserving  the  uniformity  and  purity  of  such  a  standard  of  value, 
and  on  account  of  the  impossibility  which  was  foreseen  of 
otherwise  preventing  the  inequalities  and  the  confusion  neces 
sarily  incident  to  the  different  views  of  policy  which  in  differ 
ent  communities  would  be  brought  to  bear  on  this  subject 
The  power  to  coin  money  being  thus  given  to  congress, 
founded  on  public  necessity,  it  must  carry  with  it  the  correla 
tive  power  of  protecting  the  creature  and  object  of  that  power." 
Appropriate  suggestions  follow  as  to  the  right  of  the  govern 
ment  to  adopt  measures  to  exclude  counterfeits  and  prevent 
the  true  coin  from  being  substituted  by  others  of  no  intrinsic 


APPENDIX.  373 

value,  and  the  justice  delivering  the  opinion  then  proceeds  to 
say,  that  congress  "  having  emitted  a  circulating  medium,  a 
standard  of  value  indispensable  for  the  purposes  of  the  community 
and  for  the  action  of  the  government  itself,  the  congress  is  ac 
cordingly  authorized  and  bound  in  duty  to  prevent  its  debase 
ment  and  expulsion  and  the  destruction  of  the  general  confi 
dence  and  convenience  by  the  influx  and  substition  of  a  spurious 
coin  in  lieu  of  the  constitutional  currency." 

Equally  decisive  views  were  expressed  by  the  court  six 
years  earlier,  in  the .  case  of  Gwin  v.  Breedlove,  in  which  the 
opinion  of  the  court  was  delivered  by  the  late  Mr.  Justice 
Catron,  than  whom  no  justice  who  ever  sat  in  the  court  was 
more  opposed  to  the  expression  of  an  opinion  on  a  point  not 
involved  in  the  record. 

No  state  shall  coin  money,  emit  bills  of  credit,  or  make 
anything  but  gold  and  silver  a  tender  in  payment  of  debts. 
These  prohibitions,  said  Mr.  Justice  Washington,  associated 
with  the  powers  granted  to  congress  to  coin  money  and  regu 
late  the  value  thereof  and  foreign  coin,  most  obviously  consti 
tute  members  of  the  same  family,  being  upon  the  same  subject 
and  governed  by  the  same  policy.  This  policy,  said  the 
learned  justice,  was  to  provide  and  fix  a  uniform  standard  of 
value  throughout  the  United  States,  by  which  the  commercial 
and  other  dealings  between  the  citizens  thereof,  or  between 
them  and  foreigners,  as  well  as  the  moneyed  transactions  of 
the  government,  should  be  regulated.  Language  so  well 
chosen  and  so  expMcit  cannot  be  misunderstood,  and  the  views 
expressed  by  Mr.  Justice  Johnson  in  the  same  case  are  even 
more  decisive.  He  said  the  prohibition  in  the  constitution  to 
make  anything  but  gold  or  silver  coin  a  tender  in  payment 
of  debts  is  express  and  universal.  The  framers  of  the  constitu 
tion  regarded  it  as  an  evil  to  be  repelled  without  modification, 
and  that  they  have  therefore  left  nothing  to  be  inferred  or  de 
duced  from  construction  on  the  subject. 

Recorded  as  those  opinions  have  been  for  forty-five  years, 
and  never  questioned,  they  are  certainly  entitled  to  much 
weight,  especially  as  the  principles  which  are  there  laid  down 
were  subsequently  affirmed  in  two  cases  by  the  unanimous 
opinion  of  this  court. 


874  MONOPOLIES  AND  THE   PEOPLE. 

Strong  support  to  the  view  here  taken  is  also  derived  from 
the  case  of  Oraig  v.  Missouri,  last  cited,  in  which  the  opinion 
was  given  by  the  chief  justice.  Loan  certificates  issued  by  the 
state  were  the  consideration  of  the  note  in  suit  in  that  case, 
and  the  defence  was  that  the  certificates  were  bills  of  credit, 
and  that  the  consideration  of  the  note  was  illegal.  Responsive 
to  that  defence  the  plaintiff  insisted  that  the  certificates  were 
not  bills  of  credit,  because  they  had  not  been  made  a  legal 
tender,  to  which  the  court  replied,  that  the  emission  of  bills  of 
credit  and  the  enactment  of  tender  laws  were  distinct  opera 
tions,  independent  of  each  other ;  that  both  were  forbidden  by 
the  constitution;  that  the  evils  of  paper  money  did  not  result 
solely  from  the  quality  of  its  being  made  a  tender  in  payment 
of  debts ;  that  that  quality  might  be  the  most  pernicious  one, 
but  that  it  was  not  an  essential  quality  of  bills  of  credit  nor 
the  only  mischief  resulting  from  such  emissions. 

Remarks  of  the  chief  justice  in  the  case  of  Stwrges  v.  Orownin- 
shield  may  also  be  referred  to  as  even  more  explicit  and  deci 
sive  to  the  same  conclusion  than  anything  embodied  in  the 
other  cases.  He  first  describes,  in  vivid  colors,  the  general 
distress  which  followed  the  war  in  which  our  independence 
was  established.  Paper  money,  he  said,  was  issued,  worthless 
lands  and  other  property  of  no  use  to  the  creditor  were  made  a 
tender  in  payment  of  debts,  and  the  time  of  payment  stipulated 
in  the  contract  was  extended  by  law.  Mischief  to  such  an  ex 
tent  was  done,  and  so  much  more  was  apprehended,  that  gen 
eral  distrust  prevailed,  and  all  confidence  between  man  and 
man  was  destroyed.  Special  reference  was  made  to  those 
grievances  by  the  chief  justice,  because  it  was  insisted  that  the 
prohibition  to  pass  laws  impairing  the  obligation  of  contracts 
ought  to  be  confined  by  the  court  to  matters  of  that  descrip 
tion,  but  the  court  was  of  a  different  opinion,  and  held  that  the 
convention  intended  to  establish  a  great  principle,  that  con 
tracts  should  be  inviolable,  that  the  provision  was  intended 
"  to  prohibit  the  use  of  any  means  by  which  the  same  mischief 
might  be  produced."  He  admitted  that  that  provision  was 
not  intended  to  prevent  the  issue  of  paper  money,  as  that  evil 
was  remedied  and  the  practice  prohibited  by  the  clause  forbid 
ding  the  states  to  "  emit  bills  of  credit,"  inserted  in  the  consti- 


APPENDIX.  375 

tution  expressly  for  that  purpose,  and  he  also  admitted  that 
the  prohibition  to  emit  bills  of  credit  was  not  intended  to  re 
strain  the  states  from  enabling  debtors  to  discharge  their  debts 
by  the  tender  of  property  of  no  real  value  to  the  creditor, 
"  because  for  that  subject  also  particular  provision  is  made  " 
in  the  constitution ;  but  he  added,  "  NOTHING  BUT  GOLD  AND 

SILVEE  COIN  CAN  BE  MADE  A  TENDER  IN  PAYMENT  OP  DEBTS." 

Utterances  of  the  kind  are  found  throughout  the  reported  decis 
ions  of  this  court,  but  there  is  not  a  sentence  or  word  to  be  found 
within  those  volumes,  from  the  organization  of  the  court  to 
the  passage  of  the  acts  of  congress  in  question,  to  support  the 
opposite  theory. 

Power,  as  before  remarked,  was  vested  in  the  congress  un 
der  the  confederation  to  borrow  money  and  emit  bills  of  credit, 
and  history  shows  that  the  power  to  emit  such  bills  had  been 
exercised,  before  the  convention  which  framed  the  constitution 
assembled,  to  an  amount  exceeding  $350,000,000.  Still  the 
draft  of  the  constitution,  as  reported,  contained  the  words, 
"  and  to  emit  bills,"  appended  to  the  clause  authorizing  con 
gress  to  borrow  money.  When  that  clause  was  reached,  says  Mr. 
Martin,  a  motion  was  made  to  strike  out  the  words,  "  to  emit 
bills  of  credit ;  "  and  his  account  of  what  followed  affords  the 
most  persuasive  and  convincing  evidence  that  the  convention, 
and  nearly  every  member  of  it,  intended  to  put  an  end  to  the 
exercise  of  such  a  power.  Against  the  motion,  he  says,  we 
urged  that  it  would  be  improper  to  deprive  the  congress  of 
that  power ;  that  it  would  be  a  novelty  unprecedented  to  estab 
lish  a  government  which  should  not  have  such  authority ;  that 
it  was  impossible  to  look  forward  into  futurity  so  far  as  to  de 
cide  that  events  might  not  happen  that  would  render  the  exer 
cise  of  such  a  power  absolutely  necessary,  &c.  But  a  majority 
of  the  convention,  he  said,  being  wise  beyond  every  event,  and 
being  willing  to  risk  any  political  evil  rather  than  admit  the 
idea  of  a  paper  emission  in  any  possible  case,  refused  to  trust  the 
authority  to  a  government  to  which  they  were  lavishing  the 
most  unlimited  powers  of  taxation,  and  to  the  mercy  of  which 
they  were  willing  blindly  to  trust  the  liberty  and  property  of 
the  citizens  of  every  state  in  the  Union,  and  "  they  erased  that 
clause  from  the  system" 


376  MONOPOLIES   AND    THE    PEOPLE. 

More  forcible  vindication  of  the  action  of  the  convention 
could  hardly  be  made  than  is  expressed  in  the  language  of  the 
Federalist,  and  the  authority  of  Judge  Story  warrants  the 
statement  that  the  language  there  employed  is  "justified  by 
almost  every  contemporary  writer,"  and  is  "  attested  ia  its 
truth  by  facts  "  beyond  the  influence  of  every  attempt  at  con 
tradiction.  Having  adverted  to  those  facts,  the  commentator 
proceeds  to  say,  "  that  the  same  reasons  which  show  the  neces 
sity  of  denying  to  the  states  the  power  of  regulating  coin, 
prove  with  equal  force  that  they  ought  not  to  be  at  liberty  to 
substitute  a  paper  medium  instead  of  coin." 

Emissions  of  the  kind  were  not  declared  by  the  Continental 
congress  to  be  a  legal  tender,  but  congress  passed  a  resolution 
declaring  that  they  ought  to  be  a  tender  in  payment  of  all  pri 
vate  and  public  debts,  and  that  a  refusal  to  receive  the  tender 
ought  to  be  an  extinguishment  of  the  debt,  and  recommended 
the  states  to  pass  such  laws.  They  even  went  further,  and  de 
clared  that  whoever  should  refuse  to  receive  the  paper  as  gold 
or  silver  should  be  deemed  an  enemy  to  the  public  liberty ; 
but  our  commentator  says  that  these  measures  of  violence  and 
terror,  so  far  from  aiding  the  circulation  of  the  paper,  led  on 
to  still  further  depreciation.  New  emissions  followed  and  new 
measures  were  adopted  to  give  the  paper  credit  by  pledging 
the  public  faith  for  its  redemption.  Effort  followed  effort  in 
that  direction,  until  the  idea  of  redemption  at  par  was  aban 
doned.  Forty  for  one  was  offered,  and  the  states  were  re 
quired  to  report  the  bills  under  that  regulation,  but  few  of  the 
old  bills  were  ever  reported,  and  of  course  few  only  of  the  con 
templated  new  notes  were  issued,  and  the  bills  in  a  brief  period 
ceased  to  circulate,  and  in  the  course  of  that  year  quietly  died 
in  the  hands  of  their  possessors. 

Bills  of  credit  were  made  a  tender  by  the  states,  but  all  such, 
as  well  as  those  issued  by  the  congress,  were  dead  in  the 
hands  of  their  possessors  before  the  convention  assembled  to 
frame  the  constitution.  Intelligent  and  impartial  belief  in  the 
theory  that  such  men,  so  instructed,  in  framing  a  government 
for  their  posterity  as  well  as  for  themselves,  would  deliberately 
vest  such  a  power,  either  in  congress  or  the  states,  as  a  part  of 
their  perpetual  system,  can  never  in  my  judgment  be  secured 


APPENDIX.  377 

in  the  face  of  the  recorded  evidences  to  the  contrary  which  the 
political  and  judicial  history  of  our  country  affords.  Such 
evidence,  so  persuasive  and  convincing  as  it  is,  must  ultimately 
bring  all  to  the  conclusion  that  neither  the  congress  nor  the 
states  can  make  anything  but  gold  or  silver  coin  a  tender  in 
payment  of  debts. 

Exclusive  power  to  coin  money  is  certainly  vested  in  con 
gress,  but  "  no  amount  of  reasoning  can  show  that  executing 
a  promissory  note  and  ordering  it  to  be  taken  in  payment  of 
public  and  private  debts  is  a  species  of  coining  money." 

Complete  refutation  of  such  theory  is  also  found  in  the  dis 
senting  opinion  in  the  former  case,  in  which  the  justice  who 
delivered  the  opinion  states  that  he  is  not  able  to  deduce  the 
power  to  pass  the  laws  in  question  from  that  clause  of  the  con 
stitution,  and  in  which  he  admits,  without  qualification,  that 
the  provision  making  such  notes  a  legal  tender  does  undoubt 
edly  impair  the  "  obligation  of  contracts  made  before  its  pass 
age."  Extended  argument,  therefore,  to  show  that  the  acts  in 
question  impair  the  obligation  of  contracts  made  before  their 
passage  is  unnecessary,  but  the  admission  stops  short  of  the 
whole  truth,  as  it  leaves  the  implication  to  be  drawn  that  the 
obligation  of  subsequent  contracts  is  not  impaired  by  such  leg 
islation.  Contracts  for  the  payment  of  money,  whether  made 
before  or  after  the  passage  of  such  a  provision,  are  contracts, 
if  the  promise  is  expressed  in  dollars,  to  pay  the  specified 
amount  in  the  money  recognized  and  established  by  the  con 
stitution  as  the  standard  of  value,  and  any  act  of  congress 
which  in  theory  compels  the  creditor  to  accept  paper  emissions, 
instead  of  the  money  so  recognized  and  established,  impairs 
the  obligation  of  such  a  contract,  no  matter  whether  the  con 
tract  was  made  before  or  after  the  act  compelling  the  creditor 
to  accept  such  payment,  as  the  constitution  in  that  respect  is  a 
part  of  the  contract,  and  by  its  terms  entitles  the  creditor  to 
demand  payment  in  the  medium  which  the  constitution  recog 
nizes  and  establishes  as  the  standard  of  value. 

Evidently  the  word  dollar,  as  employed  in  the  constitution, 

means  the  money  recognized  and  established  in  the  express 

power  vested  in  congress  to  coin  money,  regulate  the  value 

thereof  and  of  foreign  coin,  the  framers"  of  the  constitution 

47 


378  MONOPOLIES   AND   THE   PEOPLE. 

having  borrowed  and  adopted  the  word  as  used  by  the  Conti 
nental  congress  in  the  ordinance  of  the  6th  of  July,  1785,  and 
of  the  8th  August,  1786,  in  which  it  was  enacted  that  the 
money  unit  of  the  United  States  should  be  "one  dollar,"  and 
that  the  money  of  account  should  be  dollars  and  fractions  of 
dollars,  as  subsequently  provided  in  the  ordinance  establishing 
a  mint. 

Eepeated  decisions  of  this  court,  of  recent  date,  have  estab 
lished  the  rule  that  contracts  to  pay  coined  dollars  can  only  be 
satisfied  by  the  payment  of  such  money,  which  is  precisely 
equivalent  to  a  decision  that  such  notes  as  those  described  in 
the  acts  of  congress  in  question  are  not  the  money  recognized 
and  established  by  the  constitution  as  the  standard  of  value, 
as  the  money  so  recognized  and  established,  if  the  contract  is 
expressed  in  dollars,  will  satisfy  any  and  every  contract  between 
party  and  party.  Beyond  all  question  the  cases  cited  recognize 
"the  fact  accepted  by  all  men  throughout  the  world,  that  value 
is  inherent  in  the  precious  metals ;  that  gold  and  silver  are  in 
themselves  values,  and  being  such,  and  being  in  other  respects 
best  adapted  to  the  purpose,  are  the  only  proper  measures  of  value; 
that  these  values  are  determined  by  weight  and  purity,  and 
that  form  and  impress  are  simply  certificates  of  value,  worthy 
of  absolute  reliance  only  because  of  the  known  integrity  and 
good  faith  of  the  government  which  "  put  them  in  circulation. 

When  the  intent  of  the  parties  as  to  the  medium  of  payment 
is  clearly  expressed  in  a  contract,  the  court  decide,  in  Butler  v. 
Horwite,  above  cited,  that  damages  for  the  breach  of  it,  whether 
made  before  or  since  the  enactment  of  these  laws,  may  be 
properly  assessed  so  as  to  give  effect  to  that  intent,  and  no 
doubt  is  entertained  that  that  rule  is  correct.  Parties  may 
contract  to  accept  payment  in  treasury  notes,  or  specific  arti 
cles,  or  in  bank  bills,  and  if  they  do  so  they  are  bound  to  ac 
cept  the  medium  for  which  they  contracted,  provided  the  notes, 
specific  articles,  or  bills  are  tendered  on  the  day  the  payment 
under  the  contract  becomes  due,  and  it  is  clear  that  such  a 
tender,  if  seasonable  and  sufficient  in  amount,  is  a  good  de 
fence  to  the  action.  Decided  cases  also  carry  the  doctrine 
much  further,  and  hold,  even  where  the  contract  is  payable  in 
money  and  the  promise  is  expressed  in  dollars,  that  a  tender 


APPENDIX.  379 

of  bank  bills  is  a  good  tender  if  the  party  to  whom  it  was  made 
placed  his  objections  to  receiving  it  wholly  upon  the  ground 
that  the  amount  was  not  sufficient. 

Grant  all  that,  and  still  it  is  clear  that  where  the  contract  is 
for  the  payment  of  a  certain  sum  of  money,  and  the  promise 
is  expressed  in  dollars,  or  in  coined  dollars,  the  promisee,  if  he 
sees  n't,  may  lawfully  refuse  to  accept  payment  in  any  other 
medium  than  gold  and  silver,  made  a  legal  tender  by  act  of 
congress  passed  in  pursuance  of  that  provision  of  the  constitu 
tion  which  vests  in  congress  the  power  to  coin  money,  regulate 
the  value  thereof  and  of  foreign  coin. 

Foreign  coin  of  gold  and  silver  may  be  made  a  legal  tender, 
as  the  power  to  regulate  the  value  thereof  is  vested  in  congress 
as  well  as  the  power  to  regulate  the  value  of  the  coins  fabri 
cated  and  stamped  at  the  mint. 

Opposed,  as  the  new  theory  is,  by  such  a  body  of  evidence, 
covering  the  whole  period  of  our  constitutional  history,  all 
tending  to  the  opposite  conclusion,  and  unsupported  as  the 
theory  is  by  a  single  historical  fact,  entitled  to  any  weight,  it 
would  seem  that  the  advocates  of  the  theory  ought  to  be  able 
to  give  it  a  fixed  domicile  in  the  constitution,  or  else  be  will 
ing  to  abandon  it  as  a  theory  without  any  solid  constitutional 
foundation.  Vagrancy  in  that  behalf,  if  conceded,  is  certainly 
a  very  strong  argument  at  this  day,  that  the  power  does  not 
reside  in  the  constitution  at  all,  as  if  the  fact  were  otherwise, 
the  period  of  eighty-five  years  which  has  elapsed  since  the  con 
stitution  was  adopted  is  surely  long  enough  to  have  enabled  its 
advocates  to  discover  its  locality  and  to  be  able  to  point  out  its 
home  to  those  whose  researches  have  been  less  successful  and 
whose  conscientious  convictions  lead  them  to  the  conclusion 
that,  as  applied  to  the  constitution,  it  is  a  myth  without  a  hab 
itation  or  a  name. 

Unless  the  power  to  enact  such  a  provision  can  be  referred 
to  some  one  or  more  of  the  express  grants  of  power  to  con 
gress,  as  the  requisite  means,  or  as  necessary  and  proper  for 
carrying  such  express  power  or  powers  into  execution,  it  is 
usually  conceded  that  the  provision  must  be  regarded  as  uncon 
stitutional,  as  it  is  not  pretended  that  the  constitution  contains 
any  express  grant  of  power  authorizing  such  legislation.  Pow- 


380  MONOPOLIES   AND  THE   PEOPLE. 

ers  not  granted  cannot  be  exercised  by  congress,  and  certainly 
all  must  agree  that  no  powers  are  granted  except  what  are  ex 
pressed  or  such  as  are  fairly  applicable  as  requisite  means  to 
attain  the  end  of  a  power  which  is  granted,  or,  in  other  words, 
are  necessary  and  proper  to  carry  those  which  are  expressed 
into  execution. 

Pressed  by  these  irrepealable  rules  of  construction,  as  ap 
plied  to  the  constitution,  those  who  maintain  the  affirmative 
of  the  question  under  discussion  are  forced  to  submit  a  specifi 
cation.  Courts,  in  one  or  more  cases,  have  intimated  that  the 
power  in  question  may  be  implied  from  the  express  power  to 
coin  money,  but  inasmuch  as  no  decided  case  is  referred  to 
where  the  judgment  of  the  court  rests  upon  that  ground,  the 
suggestion  will  be  dismissed  without  further  consideration,  as 
one  involving  a  proposition  too  latitudinous  to  require  refuta 
tion.  Most  of  the  cases  referred  to  attempt  to  deduce  the 
power  to  make  such  paper  emissions  a  legal  tender  from  the 
express  power  to  borrow  money,  or  from  the  power  to  declare 
war,  or  from  the  two  combined,  as  in  the  dissenting  opinion 
in  the  case  which  is  now  overruled. 

Authority,  it  is  conceded,  exists  in  congress  to  pass  laws  pro- 
vidifag  for  the  issue  of  treasury  notes,  based  on  the  national 
credit,  as  necessary  and  proper  means  for  fulfilling  the  end  of 
the  express  power  to  borrow  money,  nor  can  it  be  doubted  at 
this  day,  that  such  notes,  when  issued  by  the  proper  authority, 
may  lawfully  circulate  as  credit  currency,  and  that  they  may, 
in  that  conventional  character,  be  lawfully  employed,  if  the  act 
authorizing  their  issue  so  provides,  to  pay  duties,  taxes,  and  all 
the  public  exactions  required  to  be  paid  into  the  national 
treasury.  Public  creditors  may  also  be  paid  in  such  currency 
by  their  own  consent,  and  they  may  be  used  in  all  other  cases, 
where  the  payment  in  such  notes  comports  with  the  terms  of 
the  contract.  Established  usage  founded  upon  the  practice  of 
the  government,  often  repeated,  has  sanctioned  these  rules, 
until  it  may  now  be  said  that  they  are  not  open  to  controversy, 
but  the  question  in  the  cases  before  the  court  is  whether  the 
congress  may  declare  such  notes  to  be  lawful  money,  make 
them  a  legal  tender,  and  impart  to  such  a  currency  the  quality 
of  being  a  standard  of  value,  and  compel  creditors  to  accept 


APPENDIX.  381 

the  payment  of  their  debts  in  such  a  currency  as  the  equivalent 
of  the  money  recognized  and  established  by  the  constitution 
as  the  standard  of  value  by  which  the  value  of  all  other  com 
modities  is  to  be  measured.  Financial  measures,  of  various 
kinds,  for  borrowing  money  to  supply  the  wants  of  the  treas 
ury,  beyond  the  receipts  from  taxation  and  the  sales  of  the 
public  lands,  have  been  adopted  by  the  government  since  the 
United  States  became  an  independent  nation.  Subscriptions 
for  a  loan  of  twelve  millions  of  dollars  were,  on  the  4th  of 
August,  1790,  directed  to  be  opened  at  the  treasury,  to  be 
made  payable  in  certificates  issued  for  the  debt  according  to 
their  specie  value.  Measures  of  the  kind  were  repeated  in 
rapid  succession  for  several  years,  and  laws  providing  for  loans 
in  one  form  or  another  appear  to  have  been  the  preferred  mode 
of  borrowing  money,  until  the  30th  of  June,  1812,  when  the 
first  act  was  passed  "  to  authorize  the  issue  of  treasury  notes. 

Loans  had  been  previously  authorized  in  repeated  instances, 
as  will  be  seen  by  the  following  references,  to  which  many 
more  might  be  added. 

Earnest  opposition  was  made  to  the  passage  of  the  first  act 
of  congress  authorizing  the  issue  of  treasury  notes,  but  the 
measure  prevailed,  and  it  may  be  remarked  that  the  vote  on 
the  occasion  was  ever  after  regarded  as  having  settled  the 
question  as  to  the  constitutionality  of  such  an  act.  Five  mill 
ions  of  dollars  were  directed  to  be  issued  by  that  act,  and  the 
secretary  of  the  treasury,  with  the  approbation  of  the  president, 
was  empowered  to  cause  such  portion  of  the  notes  as  he  might 
deem  expedient  to  be  issued  at  par  "  to  such  public  creditors 
or  other  persons  as  may  choose  to  receive  such  notes  in  payment"  it 
never  having  occured  to  any  one  that  even  a  public  creditor 
could  be  compelled  to  receive  such  notes  in  payment  except 
by  his  own  consent.  Twenty  other  issues  of  such  notes  were 
authorized  by  congress  in  the  course  of  the  fifty  years  next 
after  the  passage  of  that  act  and  before  the  passage  of  the  acts 
making  such  notes  a  legal  tender,  and  every  one  of  such  prior 
acts,  being  twenty  in  all,  contains  either  in  express  words  or 
by  necessary  implication,  an  equally  decisive  negation  to  the 
new  constitutional  theory  that  congress  can  make  paper  emiss 
ions  either  a  standard  of  value  or  a  legal  tender.  Superadded 


382  MONOPOLIES  AND  THE   PEOPLE. 

to  the  conceded  fact  that  the  constitution  contains  no  express 
words  to  support  such  a  theory,  this  long  and  unbroken  usage, 
that  treasury  notes  shall  not  be  constituted  a  standard  of  value 
nor  be  made  a  tender  in  payment  of  debts,  is  entitled  to  great 
weight,  and  when  taken  in  connection  with  the  persuasive 
and  convincing  evidence,  derived  from  the  published  proceed 
ings  of  the  convention,  that  the  framers  of  the  constitution 
never  intended  to  grant  any  such  power,  and  from  the  recor 
ded  sentiments  of  the  great  men  whose  arguments  in  favor  of 
the  reported  draft  procured  its  ratification,  and  supported  as 
that  view  is  by  the  repeated  decisions  of  this  court,  and  by  the 
infallible  rule  of  interpretation  that  the  language  of  one  ex 
press  power  shall  not  be  so  expanded  as  to  nullify  the  force 
and  effect  of  another  express  power  in  the  same  instrument,  it 
seems  to  me  that  it  ought  to  be  deemed  final  and  conclusive 
that  congress  cannot  constitute  such  notes  or  any  other  paper 
emissions  a  constitutional  standard  of  value,  or  make  them  a 
legal  tender  in  payment  of  debts  —  especially  as  it  covers  the 
period  of  two  foreign  wars,  the  creation  of  the  second  national 
bank,  and  the  greatest  financial  revulsions  through  which  our 
country  has  ever  passed. 

Guided  by  the  views  expressed  in  the  dissenting  opinion  in 
the  former  case,  it  must  be  taken  for  granted  that  the  legal 
tender  feature  in  the  acts  in  question  was  placed  emphatically, 
by  those  who  enacted  the  provision,  upon  the  necessity  of  the 
measure  to  the  further  borrowing  of  money  and  maintaining 
the  army  and  navy,  and  such  appears  to  be  the  principal  ground 
assumed  in  the  present  opinion  of  the  court.  Enough  also  ap 
pears  in  some  of  the  interrogative  sentences  of  the  dissenting 
opinion  to  show  that  the  learned  justice  who  delivered  it  in 
tended  to  place  the  dissent  very  largely  upon  the  same  ground. 

Nothing  need  be  added,  it  would  seem,  to  show  that  the 
power  to  make  such  notes  a  standard  of  value  and  a  legal 
tender  cannot  be  derived  from  the  power  to  borrow  money, 
without  B.O  expanding  it  by  implication  as  to  nullify  the  power 
to  coin  money  and  regulate  its  value,  nor  without  extending 
the  scope  and  operation  of  the  power  to  borrow  money  to  an 
object  never  contemplated  by  the  framers  of  the  constitution; 
and  if  so,  then  it  only  remains  to  inquire  whether  it  may  be 


APPENDIX.  383 

implied  from  the  power  to  declare  war,  to  raise  and  support 
armies,  or  to  provide  and  maintain  a  navy,  or  "  to  enable  the 
government  to  borrow  money  to  carry  on  the  war,"  as  the 
phrase  is  in  the  dissenting  opinion  in  the  former  case. 

Money  is  undoubtedly  the  sinews  of  war,  but  the  power  to 
raise  money  to  carry  on  war,  under  the  constitution,  is  not  an 
implied  power,  and  whoever  adopts  that  theory  commits  a  great 
constitutional  error.  Congress  may  declare  war  and  congress 
may  appropriate  all  moneys  in  the  treasury  to  carry  on  the  war, 
or  congress  may  coin  money  for  that  purpose,  or  borrow  money 
to  any  amount  for  the  same  purpose,  or  congress  may  lay  and 
collect  taxes,  duties,  imposts,  and  excises  to  replenish  the  treas 
ury,  or  may  dispose  of  the  public  lands  or  other  property  be 
longing  to  the  United  States,  and  may  in  fact,  by  the  exercise 
of  the  express  powers  of  the  constitution,  command  the  whole 
wealth  and  substance  of  the  people  to  sustain  the  public  credit 
and  prosecute  the  war  to  a  successful  termination.  Two  for 
eign  wars  were  successfully  conducted  by  means  derived  from 
those  sources,  and  it  is  not  doubted  that  those  express  powers 
will  always  enable  congress  to  maintain  the  national  credit  and 
defray  the  public  expenses  in  every  emergency  which  may 
arise,  even  though  the  national  independence  should  be  as 
sailed  by  the  combined  forces  of  all  the  rest  of  the  civilized 
world.  All  remarks,  therefore,  in  the  nature  of  entreaty  or 
appeal,  in  favor  of  an  implied  power  to  fulfil  the  great  purpose 
of  national  defence  or  to  raise  money  to  prosecute  a  war,  are 
a  mere  waste  of  words,  as  the  most  powerful  and  comprehen 
sive  means  to  accomplish  the  purpose  for  which  the  appeal  is 
made  are  found  in  the  express  powers  vested  in  congress  to 
lay  iind  collect  taxes,  duties,  imposts,  and  excises  without  lim 
itation  as  to  amount,  to  borrow  money  also  without  limitation, 
and  to  coin  money,  dispose  of  the  public  lands,  ai:d  to  appro 
priate  all  moneys  in  the  public  treasury  to  that  purpose. 

Weighed  in  the  light  of  these  suggestions,  as  the  question 
under  discussion  should  be,  it  is  plain,  not  only  that  the  exer 
cise  of  such  an  implied  power  is  unnecessary  to  supply  the 
sinews  of  war,  but  that  the  framers  of  the  constitution  never 
intended  to  trust  a  matter  of  such  great  and  vital  importance 
as  that  of  raising  means  for  the  national  defence  or  for  the 


S84  MONOPOLIES   AND   THE    PEOPLE. 

prosecution  of  a  war  to  any  implication  whatever,  as  they  had 
learned  from  bitter  experience  that  the  great  weakness  of  the 
confederation  during  the  war  for  independence  consisted  in 
the  want  of  such  express  powers.  Influenced  by  those  consid 
erations  the  framers  of  the  constitution  not  only  authorized 
congress  to  lay  and  collect  taxes,  duties,  imposts,  and  excises 
to  any  and  every  extent,  but  also  to  coin  money  and  to  borrow 
money  without  any  limitation  as  to  amount,  showing  that  the 
argument  that  to  deny  the  implied  power  to  make  paper  emis 
sions  a  legal  tender  will  be  to  cripple  the  government,  is  a 
mere  chimera,  without  any  solid  constitutional  foundation  for 
its  support. 

Comprehensive,  however,  as  the  power  of  Federal  taxation 
is,  being  without  limitation  as  to  amount,  still  there  are  some 
restrictions  as  to  the  manner  of  its  exercise,  and  some  excep 
tions  as  to  the  objects  to  which  it  may  be  applied.  Bills  for 
raising  revenue  must  originate  in  the  house  of  representa 
tives;  duties,  imposts,  and  excises  must  be  uniform  through 
out  the  United  States ;  direct  taxes  must  be  apportioned  ac 
cording  to  numbers;  regulations  of  commerce  and  revenue 
shall  not  give  any  preference  to  the  ports  of  one  state  over 
those  of  another;  nor  shall  vessels  bound  to  or  from  one  state 
be  obliged  to  enter,  clear,  or  pay  duties  in  another;  nor  shall 
any  tax  or  duty  be  laid  on  articles  exported  from  any  state. 

Preparation  for  war  may  be  made  in  peace,  but  neither  the 
necessity  for  such  preparation  nor  the  actual  existence  of  war 
can  have  the  effect  to  abrogate  or  supersede  those  restrictions, 
or  to  empower  congress  to  tax  the  articles  excepted  from  taxa 
tion  by  the  constitution.  Implied  exceptions  also  exist,  limit 
ing  the  power  of  federal  taxation  as  well  as  that  of  the  states, 
and  when  an  exception  of  that  character  is  ascertained  the  ob 
jects  falling  within  it  are  as  effectually  shielded  from  taxation 
as  those  falling  within  an  express  exception,  for  the  plain 
reason  that  the  "  government  of  the  United  States  is  acknowl 
edged  by  all  to  be  one  of  enumerated  powers,"  from  which  it 
necessarily  follows  that  powers  not  granted  cannot  be  exercised. 

Moneys  may  be  raised  by  taxes,  duties,  imposts,  and  excises 
to  carry  on  war  as  well  as  to  pay  the  public  debt  or  to  provide 
for  the  common  defence  and  general  welfare,  but  no  appropri- 


APPENDIX.  385 

ation  of  money  to  that  use  can  be  made  for  a  period  longer 
than  two  years,  nor  can  congress,  in  exercising  the  power  to 
levy  taxes  for  that  purpose,  or  any  otner,  abrogate  or  supersede 
those  restrictions,  exceptions,  and  limitations,  as  they  are  a 
part  of  the  constitution,  and  as  such  are  as  obligatory  in  war 
as  in  peace,  as  any  other  rule  would  subvert,  in  time  of  war, 
every  restriction,  exception,  limitation,  and  prohibition  in  the 
constitution,  and  invest  congress  with  unlimited  power,  even 
surpassing  that  possessed  by  the  British  parliament. 

Congress  may  also  borrow  money  to  carry  on  war,  without 
limitation,  and  in  exercising  that  express  power  may  issue 
treasury  notes  as  the  requisite  means  for  carrying  the  express 
power  into  execution,  but  congress  cannot  constitute  such  notes 
a  standard  of  value  nor  make  them  a  legal  tender,  neither  in 
time  of  war  nor  in  time  of  peace,  for  at  least  two  reasons, 
either  of  which  is  conclusive  that  the  exercise  of  such  a  power 
is  not  warranted  by  the  constitution :  (1.)  Because  the  pub 
lished  proceedings  of  the  convention  which  adopted  the  con 
stitution,  and  of  the  state  conventions  which  ratified  it,  show 
that  those  who  participated  in  those  deliberations  never  in 
tended  to  confer  any  such  power.  (2.)  Because  such  a  power, 
if  admitted  to  exist,  would  nullify  the  effect  and  operation  of 
the  express  power  to  coin  money,  regulate  the  value  thereof 
and  of  foreign  coin;  as  it  would  substitute  a  paper  medium  in 
the  place  of  gold  and  silver  coin,  which  in  itself,  as  compared 
with  coin,  possesses  no  value,  is  not  money,  either  in  the  con 
stitutional  or  commercial  sense,  but  only  a  promise  to  pay 
money,  in  never  worth  par,  and  often  much  less,  even  as  do 
mestic  exchange,  and  is  always  fluctuating  and  never  acknowl 
edged  either  as  a  medium  of  exchange  or  a  standard  of  value 
in  any  foreign  market  known  to  American  commerce. 

Power  to  issue  such  notes,  it  is  conceded,  exists  without 
limitation,  but  the  question  is  whether  the  framers  of  the  con 
stitution  intended  that  congress,  in  the  exercise  of  that  power 
or  the  power  to  borrow  money,  whether  in  peace  or  war,  should 
be  empowered  to  constitute  paper  emissions,  of  any  kind,  a 
standard  of  value,  and  make  the  same  a  legal  tender  in  pay 
ment  of  debts.  Mere  convenience,  or  even  a  financial  neces 
sity  in  a  single  case,  cannot  be  the  test,  but  the  question  is, 
48 


386  MONOPOLIES  AND   THE   PEOPLE. 

What  did  the  framers  of  the  constitution  intend  at  the  time  the 
instrument  was  adopted  and  ratified  ? 

Constitutional  powers,  of  the  kind  last  mentioned  —  that  is, 
the  power  to  ordain  a  standard  of  value  and  to  provide  a  cir 
culating  medium  for  a  legal  tender  —  are  subject  to  no  muta 
tions  of  any  kind.  They  are  the  same  in  peace  and  in  war. 
What  the  grants  of  power  meant  when  the  constitution  was 
adopted  and  ratified  they  mean  still,  and  their  meaning  can 
never  be  changed  except  as  described  in  the  fifth  article  pro 
viding  for  amendments,  as  the  constitution  u  is  a  law  for  rul 
ers  and  people,  equally  in  war  and  in  peace,  and  covers  with 
the  shield  of  its  protection  all  classes  of  men  and  under  all 
circumstances." 

Delegated  power  ought  never  to  be  enlarged  beyond  the  fair 
ecope  of  its  terms,  and  that  rule  is  emphatically  applicable  in 
the  construction  of  the  constitution.  Restrictions  may  at  times 
be  inconvenient,  or  even  embarrassing,  but  the  power  to  re 
move  the  difiiculty  by  amendment  is  vested  in  the  people,  and 
if  they  do  not  exercise  it,  the  presumption  is  that  the  incon 
venience  is  a  less  evil  than  the  mischief  to  be  apprehended  if 
the  restriction  should  be  removed  and  the  power  extended,  or 
that  the  existing  inconvenience  is  the  least  of  the  two  evils ; 
and  it  should  never  be  forgotten  that  the  government  ordained 
and  established  by  the  constitution  is  a  government  "  of  limit 
ed  and  enumerated  powers,"  and  that  to  depart  from  the  true 
import  and  meaning  of  those  powers  is  to  establish  a  new  con 
stitution  or  to  do  for  the  people  what  they  have  not  chosen  to 
do  for  themselves,  and  to  usurp  the  functions  of  a  legislator 
and  desert  those  of  an  expounder  of  the  law.  Arguments 
drawn  from  impolicy  or  inconvenience,  says  Judge  Story, 
ought  here  to  be  of  no  weight,  as  "  the  only  sound  principle  is 
to  declare  ita  lex  scripta  est,  to  follow  and  to  obey." 

For  these  reasons  I  am  of  the  opinion  that  the  judgment  in 
each  of  the  cases  before  the  court  should  be  reversed. 


CHAPTER   IV. 


DISSENTING   OPINION    OF   JUSTICE   FIELD. 


WHILST  I  agree  with  the  chief  justice  in  the  views 
expressed  in  his  opinion  in  these  cases,  the  great 
importance  which  I  attach  to  the  question  of  legal 
tender  induces  me  to  present  some  further  considerations  on 
the  subject. 

Nothing  has  been  heard  from  counsel  in  these  cases,  and 
nothing  from  the  present  majority  of  the  court,  which  has  cre 
ated  a  doubt  in  my  mind  of  the  correctness  of  the  judgment 
rendered  in  the  case  of  Hepburn  v.  Griswold,  or  of  the  conclu 
sions  expressed  in  the  opinion  of  the  majority  of  the  court  as 
then  constituted.  That  judgment  was  reached  only  after  re 
peated  arguments  were  heard  from  able  and  eminent  counsel, 
and  after  every  point  raised  on  either  side  had  been  the  subject 
of  extended  deliberation. 

The  questions  presented  in  that  case  were  also  involved  in 
several  other  cases,  and  had  been  elaborately  argued  in  them. 
It  is  not  extravagant  to  say  that  no  case  has  ever  been  decided 
by  this  court  since  its  organization,  in  which  the  questions 
presented  were  more  fully  argued  or  more  maturely  consid 
ered.  It  was  hoped  that  a  judgment  thus  reached  would  not 
be  lightly  disturbed.  It  was  hoped  that  it  had  settled  forever, 
that  under  a  constitution  ordained,  among  other  things,  "  to 
establish  justice,"  legislation  giving  to  one  person  the  right  to 
discharge  his  obligations  to  another  by  nominal  instead  of 
actual  fulfillment,  could  never  be  justified. 

I  shall  not  comment  upon  the  causes  which  have  led  to  a  re 
versal  of  that  j  udgment.  They  are  patent  to  every  one.  I  will 
simply  observe  that  the  chief  justice  and  the  associate  justices, 
who  constituted  the  majority  of  the  court  when  that  judgment 
was  rendered,  still  adhere  to  their  former  convictions.  To 


388  MONOPOLIES   AND   THE    PEOPLE. 

them  the  reasons  for  the  original  decision  are  as  cogent  and 
convincing  now  as  they  were  when  that  decision  was  pro 
nounced;  and  to  them  its  justice,  as  applied  to  past  contracts, 
is  as  clear  to-day  as  it  was  then. 

In  the  cases  now  before  us  the  questions  stated,  by  order  of 
the  court,  for  the  argument  of  counsel,  do  not  present  with 
entire  accuracy  the  questions  actually  argued  and  decided.  As 
stated,  the  questions  are  :  1st.  Is  the  act  of  congress  known 
as  the  legal  tender  act  constitutional  as  to  contracts  made  be 
fore  its  passage  ?  2d.  Is  it  valid  as  applicable  to  transactions 
since  its  passage  ? 

The  act  thus  designated  as  the  legal  tender  act  is  the  act  of 
congress  of  February  25th,  1862,  authorizing  the  issue  of 
United  States  notes,  and  providing  for  their  redemption  or 
funding,  and  for  funding  the  floating  debt  of  the  United  States ; 
and  the  questions,  as  stated,  would  seem  to  draw  into  discus 
sion  the  validity  of  the  entire  act ;  whereas,  the  only  questions 
intended  for  argument,  and  actually  argued  and  decided,  re 
late  —  1st,  to  the  validity  of  that  provision  of  the  act  which 
declares  that  these  notes  shall  be  a  legal  tender  in  payment  of 
debts,  as  applied  to  private  debts  and  debts  of  the  government 
contracted  previous  to  the  passage  of  the  act ;  and  2d,  to  the 
validity  of  the  provision  as  applied  to  similar  contracts  subse 
quently  made.  The  case  of  Parker  v.  Davis  involves  the  con 
sideration  of  the  first  question ;  and  the  case  of  Knox  v.  Lee 
is  supposed  by  a  majority  of  the  court  to  present  the  second 
question. 

No  question  was  raised  as  to  the  validity  of  the  provisions 
of  the  act  authorizing  the  issue  of  the  notes,  and  making  them 
receivable  for  dues  to  the  United  States ;  nor  do  I  perceive 
that  any  objection  could  justly  be  made  at  this  day  to  these 
provisions.  The  issue  of  the  notes  was  a  proper  exercise  of 
the  power  to  borrow  money,  which  is  granted  to  congress 
without  limitation.  The  extent  to  which  the  power  may  be 
exercised  depends,  in  all  cases,  upon  the  judgment  of  that  body 
as  to  the  necessities  of  the  government.  The  power  to  borrow 
includes  the  power  to  give  evidences  of  indebtedness  and  obli 
gations  of  repayment.  Instruments  of  this  character  are 
among  the  securities  of  the  United  States  mentioned  in  the 


APPENDIX.  389 

constitution.  These  securities  are  sometimes  in  the  form  of 
certificates  of  indebtedness,  but  they  may  be  issued  in  any  other 
form,  and  in  such  form  and  in  such  amounts  as  will  fit  them 
for  general  circulation,  and  to  that  end  may  be  made  payable 
to  the  bearer  and  transferable  by  delivery.  The  form  of 
notes,  varying  in  amounts  to  suit  the  convenience  or  ability  of 
the  lender,  has  been  found  by  experience  a  convenient  form, 
and  the  one  best  calculated  to  secure  the  readiest  acceptance 
and  the  largest  loan.  It  has  been  the  practice  of  the  govern 
ment  to  use  notes  of  this  character  in  raising  loans  and  obtain 
ing  supplies  from  an  early  period  in  its  history,  their  receipt  by 
third  parties  being  in  all  cases  optional. 

In  June,  1812,  congress  passed  an  act  which  provided  for 
the  issue  of  treasury  notes,  and  authorized  the  secretary  of  the 
treasury,  with  the  approbation  of  the  president,  "  to  borrow 
from  time  to  time,  not  under  par,  such  sums  "  as  the  president 
might  think  expedient,  "  on  the  credit  of  such  notes." 

In  February,  1813,  congress  passed  another  act  for  the  issue 
of  treasury  notes,  declaring  u  that  the  amount  of  money  bor 
rowed  or  obtained  by  virtue  of  the  notes  "  issued  under  its 
second  section  should  be  a  part  of  the  money  authorized  to  be 
borrowed  under  a  previous  act  of  the  same  session.  There  are 
numerous  other  acts  of  a  similar  character  on  our  statute  books. 
More  than  twenty,  I  believe,  were  passed  previous  to  the  legal 
tender  act. 

In  all  of  them  the  issue  of  the  notes  was  authorized  as  a 
means  of  borrowing  money,  or  obtaining  supplies,  or  paying 
the  debts  of  the  United  States,  and  in  all  of  them  the  receipt 
of  the  notes  by  third  parties  was  purely  voluntary.  Thus,  in 
the  first  act,  of  June,  1812,  the  secretary  of  the  treasury  was 
authorized  not  only  to  borrow  on  the  notes,  but  to  issue  such 
notes  as  the  president  might  think  expedient  "in  payment  of 
supplies  or  debts  due  by  the  United  States  to  such  public 
creditors  or  other  persons  "  as  might  "choose  to  receive  such  notes 
in  payment  at  par."  Similar  provisions  are  found  in  all  the  acts 
except  where  the  notes  are  authorized  simply  to  take  up  pre 
vious  loans. 

The  issue  of  the  notes  for  supplies  purchased  or  services 
rendered  at  the  request  of  the  United  States  is  only  giving 


390  MONOPOLIES   AND   THE   PEOPLE. 

their  obligations  for  an  indebtedness  thus  incurred ;  and  the 
same  power  which  authorizes  the  issue  of  notes  for  money 
must  also  authorize  their  issue  for  whatever  is  received  as  an 
equivalent  for  money.  The  result  to  the  United  States  is  the 
same  as  if  the  money  were  actually  received  for  the  notes  and 
then  paid  out  for  the  supplies  or  services. 

The  notes  issued  under  the  act  of  congress  of  February 
25th,  1862,  differ  from  the  treasury  notes  authorized  by  the 
previous  acts  to  which  I  have  referred  in  the  fact  that  they  do 
not  bear  interest  and  do  not  designate  on  their  face  a  period  at 
which  they  shall  be  paid,  features  which  may  affect  their  value 
in  the  market  but  do  not  change  their  essential  character. 
There  cannot  be,  therefore,  as  already  stated,  any  just  objec 
tion  at  this  day  to  the  issue  of  the  notes,  nor  to  their  adapta 
tion  in  form  for  general  circulation. 

Nor  can  there  be  any  objection  to  their  being  made  receiv 
able  for  dues  to  the  United  State's.  Their  receivability  in  this 
respect  is  only  the  application  to  the  demands  of  the  govern 
ment,  and  demands  against  it,  of  the  just  principle  which  is 
applied  to  the  demands  of  individuals  against  each  other,  that 
cross-demands  shall  offset  and  satisfy  each  other  to  the  extent 
of  their  respective  amounts.  No  rights  of  third  parties  are  in 
any  respect  affected  by  the  application  of  the  rule  here,  and 
the  purchasing  and  borrowing  power  of  the  notes  are  greatly 
increased  by  making  them  thus  receivable  for  the  public  dues. 
The  objection  to  the  act  does  not  lie  in  these  features;  it  lies 
in  the  provision  which  declares  that  the  notes  shall  be  "  a  legal 
tender  in  payment  of  all  debts,  public  and  private, "  so  far  as 
that  provision  applies  to  private  debts,  and  debts  owing  by  the 
United  States. 

In  considering  the  validity  and  constitutionality  of  this  pro 
vision,  I  shall  in  the  first  place  confine  myself  to  the  provision 
in  its  application  to  private  debts.  Afterwards  I  shall  have 
something  to  say  of  the  provision  in  its  application  to  debts 
owing  by  the  government. 

In  the  discussions  upon  the  subject  of  legal  tender  the  advo 
cates  of  the  measure  do  not  agree  as  to  the  power  in  the  con 
stitution  to  which  it  shall  be  referred ;  some  placing  it  upon 
the  power  to  borrow  money,  some  on  the  coining  power,  and 


APPENDIX.  391 

some  on  what  is  termed  a  resulting  power  from  the  general 
purposes  of  the  government ;  and  these  discussions  have  been 
accompanied  by  statements  as  to  the  effect  of  the  measure, 
and  the  consequences  which  must  have  followed  had  it  been 
rejected,  and  which  will  now  occur  if  its  validity  be  not  sus 
tained,  which  rest  upon  no  solid  foundation,  and  are  not  cal 
culated  to  aid  the  judgment  in  coming  to  a  just  conclusion. 

In  what  I  have  to  say  I  shall  endeaver  to  avoid  any  such 
general  and  loose  statements,  and  shallr direct  myself  to  an  in 
quiry  into  the  nature  of  these  powers  to  which  the  measure  is 
referred,  and  the  relation  of  the  measure  to  them. 

Now  if  congress  can,  by  its  legislative  declaration,  make  the 
notes  of  the  United  States  a  legal  tender  in  payment  of  private 
debts — that  is,  can  make  them  receivable  against  the  will  of  the 
creditor  in  satisfation  of  debts  due  to  him  by  third  parties — 
its  power  in  this  respect  is  not  derived  from  its  power  to  bor 
row  money,  under  which  the  notes  were  issued.  That  power 
is  not  different  in  its  nature  or  essential  incidents  from  the 
power  to  borrow  possessed  by  individuals,  and  is  not  to  re. 
ceive  a  larger  definition.  Nor  is  it  different  from  the  power 
often  granted  to  public  and  private  corporations.  The  grant, 
it  is  true,  is  usually  accompanied  in  these  latter  cases  with 
limitations  as  to  the  amount  to  be  borrowed,  and  a  designation 
of  the  objects  to  which  the  money  shall  be  applied — limitations 
which  in  no  respect  affect  the  nature  of  the  power.  The 
terms  "power  to  borrow  money"  have  the  same  meaning  in 
all  these  cases,  and  not  one  meaning  when  used  by  individuals, 
another  when  granted  to  corporations,  and  still  a  different  one 
when  possessed  by  congress.  They  mean  only  a  power  to 
contract  for  a  loan  of  money  upon  considerations  to  be  agreed 
between  the  parties.  The  amount  of  the  loan,  the  time  of  re 
payment,  the  interest  it  shall  bear,  and  the  form  in  which  the 
obligation  shall  be  expressed  are  simply  matters  of  arrange 
ment  between  the  parties.  They  concern  no  one  else.  It  is 
no  part  or  incident  of  a  contract  of  this  character  that  the 
rights  or  interests  of  third  parties,  strangers  to  the  matter, 
shall  be  in  any  respect  affected.  The  transaction  is  completed 
when  the  lender  has  parted  with  his  money,  and  the  bor 
rower  has  given  his  promise  of  repayment  at  the  time,  and 


392  MONOPOLIES  AND  THE  PEOPLE. 

in  the  manner,  and  with  the  securities  stipulated  between 
them. 

As  an  inducement  to  the  loan,  and  security  for  its  repay 
ment,  the  borrower  may  of  course  pledge  such  property  or 
revenues,  and  annex  to  his  promises  such  rights  and  privileges 
as  he  may  possess.  His  stipulations  in  this  respect  are  neces 
sarily  limited  to  his  own  property,  rights,  and  privileges,  and 
cannot  extend  to  those  of  other  persons. 

Now,  whether  a  borrower — be  the  borrower  an  individual,  a 
corporation,  or  the  government — can  annex  to  the  bonds, 
notes,  or  other  evidences  of  debt  given  for  the  money  borrowed, 
any  quality  by  which  they  will  serve  as  a  means  of  satisfying 
the  contracts  of  other  parties,  must  necessarily  depend  upon 
the  question  whether  the  borrower  possesses  any  right  to  in 
terfere  with  such  contracts,  and  determine  how  they  shall  be 
satisfied.  The  right  of  the  borrower  in  this  respect  rests  upon 
no  different  foundation  than  the  right  to  interfere  with  any 
other  property  of  third  parties.  And  if  it  will  not  be  con 
tended,  as  I  think  I  may  assume  it  will  not  be,  that  the  bor 
rower  possesses  any  right,  in  order  to  make  a  loan,  to  interfere 
with  the  tangible  and  visible  property  of  third  parties,  I  do 
not  perceive  how  it  can  be  contended  that  he  has  any  right  to 
interfere  with  their  property  when  it  exists  in  the  form  of  con 
tracts.  A  large  part  of  the  property  of  every  commercial 
people  exists  in  that  form,  and  the  principle  which  excludes  a 
stranger  from  meddling  with  another's  property  which  is  vis 
ible  and  tangible,  equally  excludes  him  from  meddling  with  it 
when  existing  in  the  form  of  contracts. 

That  an  individual  or  corporation  borrowing  possesses  no 
power  to  annex  to  his  evidences  of  indebtedness  any  quality 
by  which  the  holder  will  be  enabled  to  change  his  contracts 
with  third  parties,  strangers  to  the  loan,  is  admitted;  but  it 
is  contended  that  congress  possesses  such  power  because, 
in  addition  to  the  express  power  to  borrow  money,  there 
is  a  clause  in  the  constitution  which  authorizes  congress  to 
make  all  laws  "necessary  and  proper"  for  the  execution  of 
the  powers  enumerated.  This  clause  neither  augments  nor 
diminishes  the  expressly  designated  powers.  It  only  states 
in  terms  what  congress  would  equally  have  had  the  right  to  do 


APPENDIX.  393 

without  its  insertion  in  the  constitution.  It  is  a  general  prin 
ciple  that  a  power  to  do  a  particular  act  includes  the  power  to 
adopt  all  the  ordinary  and  appropriate  means  for  its  execution. 
"  Had  the  constitution,"  says  Hamilton,  in  the  Federalist,  speak 
ing  of  this  clause,  "  been  silent  on  this  head,  there  can  be  no 
doubt  that  all  the  particular  powers  requisite  as  a  means  of  ex 
ecuting  the  general  powers  would  have  resulted  to  the  gov 
ernment  by  unavoidable  implication.  No  axiom  is  more  cleary 
established  in  law  or  in  reason,  that  whenever  the  end  is  re 
quired  the  means  are  authorized ;  whenever  a  general  power 
to  do  a  thing  is  given,  every  particular  power  necessary  for 
doing  it  is  included. 

The  subsidiary  power  existing  without  the  clause  in  ques 
tion,  its  insertion  in  the  constitution  was  no  doubt  intended, 
as  obs'erved  by  Mr.  Hamilton,  to  prevent  "  all  cavilling  refine 
ments  "  in  those  who  might  thereafter  feel  a  disposition  to 
curtail  and  evade  the  legitimate  authorities  of  the  Union ;  and 
also,  I  may  add,  to  indicate  the  true  sphere  and  limits  of  the 
implied  powers. 

But  though  the-  subsidiary  power  would  have  existed  with 
out  this  clause,  there  would  have  been  the  same  perpetually 
recurring  question  as  now,  as  to  what  laws  are  necessary  and 
proper  for  the  execution  of  the  expressly  enumerated  powers. 

The  particular  clause  in  question  has  at  different  times  un 
dergone  elaborate  discussions  in  congress,  in  cabinets,  and  in  the 
courts.  Its  meaning  was  much  debated  in  the  first  congress 
upon  the  proposition  to  incorporate  a  national  bank,  and  after 
wards  in  the  cabinet  of  Washington,  when  that  measure  was 
presented  for  his  approval.  Mr.  Jefferson,  then  secretary  of 
state,  and  Mr.  Hamilton,  then  secretary  of  the  treasury,  dif 
fered  widely  in  their  construction  of  the  clause,  and  each  gave 
his  views  in  an  elaborate  opinion.  Mr.  Jefferson  held  that  the 
word  "  necessary  "  restricted  the  power  of  congress  to  the  use 
of  those  means,  without  which  the  grant  would  be  nugatory, 
thus  making  necessary  equivalent  to  indispensable. 

Mr.  Hamilton  favored  a  more  liberal,  and  in  my  judgment, 
a  more  just  interpretation,  and  contended  that  the  terms  "  nec 
essary  and  proper"  meant  no  more  than  that  the,' measures 
adopted  must  have  an  obvious  relation  as  a  means  to  the  end 
49 


394  MONOPOLIES   AND   THE    PEOPLE. 

intended.  u  If  the  end,"  he  said,  "  be  clearly  comprehended 
within  any  of  the  specified  powers,  and  if  the  measure  have  an 
obvious  relation  to  that  end,  and  is  not  forbidden  by  any  par 
ticular  provision  of  the  constitution,  it  may  safely  be  deemed 
to  come  within  the  compass  of  the  national  authority."  "  There 
is  also,"  he  added,  "  this  further  criterion  which  may  mate 
rially  assist  the  decision  :  Does  the  proposed  measure  abridge 
a  pre-existing  right  of  any  state,  or  of  any  individual  ?  If  it 
does  not,  there  is  a  strong  presumption  in  favor  of  its  consti 
tutionality :  and  slighter  relations  to  any  declared  object  may 
be  permitted  to  turn  the  scale."  From  the  criterion  thus  indi 
cated  it  would  seem  that  the  distinguished  statesman  was  of 
opinion  that  a  measure  which  did  interfere  with  a  pre-existing 
right  of  a  state  or  an  individual  would  not  be  constitutional. 

The  interpretation  given  by  Mr.  Hamilton  was  substantially 
followed  by  Chief  Justice  Marshall,  in  McCulloch  v.  the  State  of 
Maryland,  when,  speaking  for  the  court,  he  said  that  if  the  end 
to  be  accomplished  by  the  legislation  of  congress  be  legitimate, 
and  within  the  scope  of  the  constitution,  "  all  the  means  which 
are  appropriate,  which  are  plainly  adapted  to  that  end,  and 
which  are  not  prohibited,  but  are  consistent  with  the  letter  and 
spirit  of  the  constitution,  are  constitutional."  The  chief  jus 
tice  did  not,  it  is  true,  in  terms  declare  that  legislation  which 
is  not  thus  appropriate,  and  plainly  adapted  to  a  lawful  end,  is 
unconstitutional,  but  such  is  the  plain  import  of  the  argument 
advanced  by  him ;  and  that  conclusion  must  also  follow  from 
the  principle  that,  when  legislation  of  a  particular  character  is 
specially  authorized,  the  opposite  of  such  legislation  is  inhib 
ited. 

Tested  by  the  rule  given  by  Mr.  Hamilton,  or  by  the  rule 
thus  laid  down  by  this  court  through  Mr.  Chief  Justice  Mar 
shall,  the  annexing  of  a  quality  to  the  promises  of  the  govern 
ment  for  money  borrowed,  which  will  enable  the  holder  to  use 
them  as  a  means  of  satisfying  the  demands  of  third  parties, 
cannot  be  sustained  as  the  exercise  of  an  appropriate  means  of 
borrowing.  That  is  only  appropriate  which  has  some  relation 
of  fitness  to  an  end.  Borrowing,  as  already  stated,  is  a  trans 
action  by  which,  on  one  side,  the  lender  parts  with  his  money, 
and  on  the  other  the  borrower  agrees  to  repay  it  in  such  form 


APPENDIX.  395 

and  at  such  time  as  may  be  stipulated.  Though  not  a  neces 
sary  part  of  the  contract  of  borrowing,  it  is  usual  for  the  bor 
rower  to  offer  securities  for  the  repayment  of  the  loan.  The 
fitness  which  would  render  a  means  appropriate  to  this  trans 
action  thus  considered  must  have  respect  to  the  terms  which 
are  essential  to  the  contract,  or  to  the  securities  which  the 
borrower  may  furnish  as  an  inducement  to  the  loan.  The 
quality  of  legal  tender  does  not  touch  the  terms  of  the  contract 
of  borrowing,  nor  does  it  stand  as  a  security  for  the  loan.  A 
security  supposes  some  right  or  interest  in  the  thing  pledged, 
which  is  subject  to  the  disposition  of  the  borrower. 

There  has  been  much  confusion  on  this  subject  from  a  fail 
ure  to  distinguish  between  the  adaptation  of  particular  means 
to  an  end  and  the  effect,  or  supposed  effect,  of  those  means  in 
producing  results  desired  by  the  government.  The  argument 
is  stated  thus:  the  object  of  borrowing  is  to  raise  funds;  the 
annexing  of  the  quality  of  legal  tender  to  the  notes  of  the  gov 
ernment  induces  parties  the  more  readily  to  loan  upon  them ; 
the  result  desired  by  the  government  —  the  acquisition  of  funds 
—  is  thus  accomplished ;  therefore,  the  annexing  of  the  quality 
of  legal  tender  is  an  appropriate  means  to  the  execution  of  the 
power  to  borrow.  But  it  is  evident  that  the  same  reasoning 
would  justify,  as  appropriate  means  to  the  execution  of  this 
power,  any  measures  which  would  result  in  obtaining  the  re 
quired  funds.  The  annexing  of  a  provision  by  which  the 
notes  of  the  government  should  serve  as  a  free  ticket  in  the 
public  conveyances  of  the  country,  or  for  ingress  into  places 
of  public  amusement,  or  which  would  entitle  the  holder  to  a 
percentage  out  of  the  revenues  of  private  corporations,  or  ex 
empt  his  entire  property,  as  well  as  the  notes  themselves,  from 
state  and  municipal  taxation,  would  produce  a  ready  accept 
ance  of  the  notes.  But  the  advocate  of  the  most  liberal  con 
struction  would  hardly  pretend  that  these  measures,  or  similar 
measures  touching  the  property  of  third  parties,  would  be  ap 
propriate  as  a  means  to  the  execution  of  the  power  to  borrow. 
Indeed,  there  is  no  invasion  by  government  of  the  rights  of 
third  parties  which  might  not  thus  be  sanctioned  upon  the 
pretence  that  its  allowance  to  the  holder  of  the  notes  would 
lead  to  their  ready  acceptance  and  produce  the  desired  loan. 


396  MONOPOLIES   AND  THE   PEOPLE. 

The  actual  effect  of  the  quality  of  legal  tender  in  inducing 
parties  to  receive  them  was  necessarily  limited  to  the  amount 
required  by  existing  debtors,  who  did  not  scruple  to  discharge 
with  them  their  pre-existing  liabilities.  For  moneys  desired 
from  other  parties,  or  supplies  required  for  the  use  of  the  army 
or  navy,  the  provision  added  nothing  to  the  value  of  the  notes. 
Their  borrowing  power  or  purchasing  power  depended,  by  a 
general  and  a  universal  law  of  currency,  not  upon  the  legal 
tender  clause,  but  upon  the  confidence  which  the  parties  re 
ceiving  the  notes  had  in  their  ultimate  payment.  Their  ex 
changeable  value  was  determined  by  this  confidence,  and  every 
person  dealing  in  them  advanced  his  money  and  regulated  his 
charges  accordingly. 

The  inability  of  mere  legislation  to  control  this  universal 
law  of  currency  is  strikingly  illustrated  by  the  history  of  the 
bills  of  credit  issued  by  the  Continental  congress  during  our 
Revolutionary  war.  From  June,  1775,  to  March,  1780,  these 
bills  amounted  to  over  $300,000,000.  Depreciation  followed 
as  a  natural  consequence,  commencing  in  1777,  when  the  issues 
only  equalled  $14,000,000.  Previous  to  this  time,  in  January, 
1776,  when  the  issues  were  only  $5,000,000,  congress  had,  by 
resolution,  declared  that  if  any  person  should  be  "  so  lost  to  all 
virtue  and  regard  to  his  country"  as  to  refuse  to  receive  the 
bills  in  payment,  he  should,  on  conviction  thereof  by  the  com 
mittee  of  the  city,  county,  or  district,  or,  in  case  of  appeal  from 
their  decision,  by  the  assembly,  convention,  council,  or  com 
mittee  of  safety  of  the  colony  where  he  resided,  be  "  deemed, 
published,  and  treated  as  an  enemy  of  his  country,  and  pre 
cluded  from  all  trade  or  intercourse  with  the  inhabitants  "  of 
the  colonies. 

And  in  January,  1777,  when  as  yet  the  issues  were  only 
814,000,000,  congress  passed  this  remarkable  resolution : 

"Resolved,  That  all  bills  of  credit  emitted  by  authority  of 
congress  ought  to  pass  current  in  all  payments,  trade,  and  deal 
ings  in  these  states,  and  be  deemed  in  value  equal  to  the  same 
nominal  sums  in  Spanish  milled  dollars,  and  that  whosoever 
shall  offer,  ask,  or  receive  more  in  the  said  bills  for  any  gold 
or  silver  coins,  bullion,  or  any  other  species  of  money  whatso 
ever,  than  the  nominal  sum  or  amount  thereof  in  Spanish 


APPENDIX.  397 

milled  dollars,  or  more  in  the  said  bills  for  any  lands,  houses, 
goods,  or  commodities  whatsoever  than  the  same  could  be  pur 
chased  at  of  the  same  person  or  persons  in  gold,  silver,  or  any 
other  species  of  money  whatsoever,  or  shall  offer  to  sell  any 
goods  or  commodities  for  gold  or  silver  coins  or  any  other  spe 
cies  of  money  whatsoever  and  refuse  to  sell  the  same  for  the 
said  continental  bills,  every  such  person  ought  to  be  deemed 
an  enemy  to  the  liberty  of  these  United  States  and  to  forfeit 
the  value  of  the  money  so  exchanged,  or  house,  land,  or  com 
modity  so  sold  or  offered  for  sale.  And  it  is  recommended  to 
the  legislatures  of  the  respective  states  to  enact  laws  inflicting 
such  forfeitures  and  other  penalties  on  offenders  as  aforesaid 
as  will  prevent  such  pernicious  practices.  That  it  be  recom 
mended  to  the  legislatures  of  the  United  States  to  pass  laws  to 
make  the  bills  of  credit  issued  by  the  congress  a  lawful  tender 
in  payments  of  public  and  private  debts,  and  a  refusal  thereof 
an  extinguishment  of  such  debts;  that  debts  payable  in  ster 
ling  money  be  discharged  with  continental  dollars  at  the  rate 
of  4s.  6d.  sterling  per  dollar,  and  that  in  discharge  of  all  other 
debts  and  contracts  continental  dollars  pass  at  the  rate  fixed 
by  the  respective  states  for  the  value  of  Spanish  milled  dollars." 

The  several  states  promptly  responded  to  the  recommenda 
tions  of  congress  and  made  the  bills  a  legal  tender  for  debts 
and  the  refusal  to  receive  them  an  extinguishment  of  the  debt. 

Congress  also  issued,  in  September,  1779,  a  circular  ad 
dressed  to  the  people  on  the  subject,  in  which  they  showed 
that  the  United  States  would  be  able  to  redeem  the  bills,  and 
they  repelled  with  indignation  the  suggestion  that  there  could 
be  any  violation  of  the  public  faith.  "  The  pride  of  America," 
said  the  address,  "revolts  from  the  idea;  her  citizens  know  for 
what  purposes  these  emissions  were  made,  and  have  repeatedly 
plighted  their  faith  for  the  redemption  of  them;  they  are  to 
be  found  in  every  man's  possession,  and  every  man  is  inter 
ested  in  their  being  redeemed;  they  must,  therefore,  entertain 
a  high  opinion  of  American  credulity  who  suppose  the  people 
capable  of  believing,  on  due  reflection,  that  all  America  will, 
against  the  faith,  the  honor,  and  the  interest  of  all  America, 
be  ever  prevailed  upon  to  countenance,  support,  or  permit  so 
ruinous,  so  disgraceful  a  measure.  We  are  convinced  that  the 


398  MONOPOLIES   AND   THE   PEOPLE. 

efforts  and  arts  of  our  enemies  will  not  be  wanting  to  draw  us 
into  this  humiliating  and  contemptible  situation.  Impelled 
by  malice  and  the  suggestions  of  chagrin  and  disappointment 
at  not  being  able  to  bend  our  necks  to  the  yoke,  they  will  en 
deavor  to  force  or  seduce  us  to  commit  this  unpardonable  sin 
in  order  to  subject  us  to  the  punishment  due  to  it,  and  that  we 
may  thenceforth  be  a  reproach  and  a  by-word  among  the  na 
tions.  Apprised  of  these  consequences,  knowing  the  value  of 
national  character,  and  impressed  with  a  due  sense  of  the  im 
mutable  laws  of  justice  and  honor,  it  is  impossible  that  Amer 
ica  should  think  without  horror  of  such  an  execrable  deed." 

Yet  in  spite  of  the  noble  sentiments  Contained  in  this  ad 
dress,  which  bears  the  honored  name  of  John  Jay,  then  pres 
ident  of  congress  and  afterwards  the  first  chief  justice  of  this 
court,  and  in  spite  of  legal  tender  provisions  and  harsh  penal 
statutes,  the  universal  law  of  currency  prevailed.  Depreciation 
followed  until  it  became  so  great  that  the  very  idea  of  redemp 
tion  at  par  was  abandoned. 

Congress  then  proposed  to  take  up  the  bills  by  issuing  new 
bills  on  the  credit  of  the  several  states,  guaranteed  by  the 
United  States,  not  exceeding  one-twentieth  of  the  amount  of 
the  old  issue,  the  new  bills  to  draw  interest  and  be  redeema 
ble  in  six  years.  But  the  scheme  failed,  and  the  bills  became, 
during  1780,  of  so  little  value  that  they  ceased  to  circulate  and 
"  quietly  died,"  says  the  historian  of  the  period,  "  in  the  hands 
of  their  possessors." 

And  it  is  within  the  memory  of  all  of  us  that  during  the 
late  rebellion  the  notes  of  the  United  States  issued  under  the 
legal  tender  act  rose  in  value  in  the  market  as  the  successes  of 
our  arms  gave  evidence  of  an  early  termination  of  the  war, 
and  that  they  fell  in  value  with  every  triumph  of  the  Confed 
erate  forces.  No  legislation  of  congress  declaring  these  notes 
to  be  money  instead  of  representatives  of  money  or  credit 
could  alter  this  result  one  jot  or  tittle.  Men  measured  their 
value  not  by  congressional  declaration,  which  could  not  alter 
the  nature  of  things,  but  by  the  confidence  reposed  in  their 
ultimate  payment. 

Without  the  legal  tender  provision  the  notes  would  have  cir 
culated  equally  well  and  answered  all  the  purposes  of  govern- 


APPENDIX.  399 

ment — the  only  direct  benefit  resulting  from  that  provision 
arising,  as  already  stated,  from  the  ability  it  conferred  upon 
unscrupulous  debtors  to  discharge  with  them  previous  obliga 
tions.  The  notes  of  state  banks  circulated  without  possessing 
that  quality  and  supplied  a  currency  for  the  people  just  so  long 
as  confidence  in  the  ability  of  the  banks  to  redeem  the  notes 
continued.  The  notes  issued  by  the  national  bank  associations 
during  the  war,  under  the  authority  of  congress,  amounting  to 
$300,000,000,  which  were  never  made  a  legal  tender,  circulated 
equally  well  with  the  notes  of  the  United  States.  Neither 
their  utility  nor  their  circulation  was  diminished  in  any  degree 
by  the  absence  of  a  legal  tender  quality.  They  rose  and  fell 
in  the  market  under  the  same  influences  and  precisely  to  the 
same  extent  as  the  notes  of  the  United  States,  which  possessed 
this  quality. 

It  is  foreign,  however,  to  my  argument,  to  discuss  the  utility 
of  the  legal  tender  clause.  The  utility  of  a  measure  is  not  the 
subject  of  judicial  cognizance,  nor,  as  already  intimated,  the 
test  of  its  constitutionality.  But  the  relation  of  the  measure 
as  a  means  to  an  end,  authorized  by  the  constitution,  is  a 
subject  of  such  cognizance,  and  thetest  of  its  constitutionality, 
when  it  is  not  prohibited  by  any  specific  provision  of  that  in 
strument,  and  is  consistent  with  its  letter  and  spirit.  u  The 
degree,"  said  Hamilton,  "in  which  a  measure  is  necessary,  can 
never  be  a  test  of  the  legal  right  to  adopt  it.  That  must  be  a 
matter  of  opinion,  and  can  only  be  a  test  of  expediency.  The 
relation  between  the  means  and  the  end,  between  the  nature 
of  a  means  employed  toward  the  execution  of  the  power  and 
the  object  of  that  power,  must  be  the  criterion  of  unconsti 
tutionally ;  not  the  more  or  less  of  necessity  or  utility." 

If  this  were  not  so,  if  congress  could  not  only  exercise,  as  it 
undoubtedly  may,  unrestricted  liberty  of.  choice  among  the 
means  which  are  appropriate  and  plainly  adapted  to  the  execu 
tion  of  an  express  power,  but  could  also  judge,  without  its 
conclusions  being  subject  to  question  in  cases  involving  private 
rights,  what  means  are  thus  appropriate  and  adapted,  our  gov 
ernment  would  be,  not  what  it  was  intended  to  be,  one  of 
limited,  but  one  of  unlimited  powers. 

Of  course  congress  must  inquire  in  the  first  instance,  and 


400  MONOPOLIES   AND   THE    PEOPLE. 

determine  for  itself  not  only  the  expediency,  but  the  fitness  to 
the  end  intended,  of  every  measure  adopted  by  its  legislation. 
But  the  power  of  this  tribunal  to  revise  these  determinations 
in  cases  involving  private  rights  has  been  uniformly  asserted, 
since  the  formation  of  the  constitution  to  this  day,  by  the 
ablest  statesmen  and  jurists  of  the  country. 

I  have  thus  dwelt  at  length  upon  the  clause  of  the  constitu 
tion  investing  congress  with  the  power  to  borrow  money  on 
the  credit  of  the  United  States,  because  it  is  under  that  power 
that  the  notes  of  the  United  States  were  issued,  and  it  is  upon 
the  supposed  enhanced  value  which  the  quality  of  legal  tender 
gives  to  such  notes,  as  the  means  of  borrowing,  that  the  valid 
ity  and  constitutionality  of  the  provision  annexing  this  quality 
are  founded.  It  is  true  that,  in  the  arguments  of  counsel,  and 
in  the  several  opinions  of  different  state  courts,  to  which 
our  attention  has  been  called,  and  in  the  dissenting  opinion  in 
Hepburn  v.  Gnswold,  reference  is  also  made  to  other  powers 
possessed  by  congress,  particularly  to  declare  war,  to  suppress 
insurrection,  to  raise  and  support  armies,  and  to  provide  and 
maintain  a  navy ;  all  of  which  were  called  into  exercise  and 
severely  taxed  at  the  time  the  legal  tender  act  was  passed. 
But  it  is  evident  that  the  notes  have  no  relation  to  these  pow 
ers,  or  to  any  other  powers  of  congress,  except  as  they  furnish 
a  convenient  means  for  raising  money  for  their  execution. 
The  existence  of  the  war  only  increased  the  urgency  of  the 
government  for  funds.  It  did  not  add  to  its  powers  to  raise 
such  funds,  or  change,  in  any  respect,  the  nature  of  those 
powers  or  the  transactions  which  they  authorized.  If  the 
power  to  engraft  the  quality  of  legal  tender  upon  the  notes 
existed  at  all  with  congress,  the  occasion,  the  extent,  and  the 
purpose  of  its  exercise  were  mere  matters  of  legislative  discre 
tion  ;  and  the  power  may  be  equally  exerted  when  a  loan  is 
made  to  meet  the  ordinary  expenses  of  government  in  time  of 
peace,  as  when  vast  sums  are  needed  to  raise  armies  and  pro 
vide  navies  in  time  of  war.  The  wants  of  the  government  can 
never  be  the  measure  of  its  powers. 

The  constitution  has  specifically  designated  the  means  by 
which  funds  can  be  raised  for  the  uses  of  the  government, 
either  in  war  or  peace.  These  are  taxation,  borrowing,  coin- 


APPENDIX.  401 

ing,  and  the  sale  of  its  public  property.  Congress  is  empow 
ered  to  levy  and  collect  taxes,  duties,  imposts,  and  excises,  to 
any  extent  which  the  public  necessities  may  require.  Its  pow 
er  to  borrow  is  equally  unlimited.  It  can  convert  any  bullion 
it  may  possess  into  coin,  and  it  can  dispose  of  the  public  lands 
and  other  property  of  the  United  States,  or  any  part  of  such 
property.  The  designation  of  these  means  exhausts  the  powers 
of  congress  on  the  subject  of  raising  money.  The  designation 
of  the  means  is  a  negation  of  all  others,  for  the  designation 
would  be  unnecessary  and  absurd  if  the  use  of  any  and  all 
means  were  permissible  without  it.  These  means  exclude  a 
resort  to  forced  loans,  and  to  any  compulsory  interference  with 
the  property  of  third  person*,  except  by  regular  taxation  in  one 
of  the  forms  mentioned. 

But  this  is  not  all.  The  power  to  "  coin  money  "  is,  in  my 
judgment,  inconsistent  with  and  repugnant  to  the  existence  of 
a  power  to  make  anything  but  coin  a  legal  tender.  To  coin 
money  is  to  mould  metallic  substances  having  intrinsic  value 
into  certain  forms  convenient  for  commerce,  and  to  impress 
them  with  the  stamp  of  the  government  indicating  their  value. 
Coins  are  pieces  of  metal,  of  definite  weigh"  and  value,  thus 
stamped  by  national  authority.  Such  is  the  natural  import  of 
the  terms,  "  to  coin  money,"  and  "  coin ;  "  and  if  there  were 
any  doubt  that  this  is  their  meaning  in  the  constitution,  it 
would  be  removed  by  the  language  which  immediately  follows 
the  grant  of  the  "  power  to  coin,"  authorizing  congress  to  reg 
ulate  the  value  of  the  money  thus  coined,  and  also  "  of  foreign 
coin,"  and  by  the  distinction  made  in  other  clauses  between 
coin  and  the  obligations  of  the  general  government  and  of  the 
several  states. 

The  power  of  regulation  conferred  is  the  power  to  determine 
the  weight  and  purity  of  the  several  coins  struck,  and  their 
consequent  relation  to  the  monetary  unit  which  might  be  es 
tablished  by  the  authority  of  the  government — a  power  which 
can  be  exercised  with  reference  to  the  metallic  coins  of  foreign 
countries,  but  which  is  incapable  of  execution  with  reference 
to  their  obligations  or  securities. 

Then,  in  the  clause  of  the  constitution  immediately  following, 
authorizing  congress  "  to  provide  for  the  punishment  of  coun- 
50 


402  MONOPOLIES   AND    THE    PEOPLE. 

terfeiting  the  securities  and  current  coin  of  the  United  States," 
a  distinction  between  the  obligations  and  coins  of  the  gen 
eral  government  is  clearly  made.  And  in  the  tenth  section, 
which  forbids  the  states  to  "  coin  money,  emit  bills  of  credit, 
and  make  anything  but  gold  and  silver  coin  a  tender  in 
payment  of  debts,"  a  like  distinction  is  made  between  coin 
and  the  obligations  of  the  several  states.  The  terms  gold  and 
silver,  as  applied  to  the  coin,  exclude  the  possibility  of  any 
other  conclusion. 

Now,  money,  in  the  true  sense  of  the  term,  is  not  only  a 
medium  of  exchange,  but  it  is  a  standard  of  value  by  which  all 
other  values  are  measured.  Blackstone  says,  and  Story  re 
peats  his  language:  "  Money  is  a  universal  medium  or  com 
mon  standard,  by  a  comparison  with  which  the  value  of  all 
merchandise  may  be  ascertained,  or  it  is  a  sign  which  repre 
sents  the  respective  values  of  all  commodities."  Money  being 
such  standard,  its  coins  or  pieces  are  necessarily  a  legal  tender 
to  the  amount  of  their  respective  values  for  all  contracts  or 
judgments  payable  in  money,  without  any  legislative  enact 
ment  to  make  them  so.  The  provisions  in  the  different  coin 
age  acts  that  the  coins  to  be  struck  shall  be  such  legal  tender, 
are  merely  declaratory  of  their  effect  when  offered  in  payment, 
and  are  not  essential  to  give  them  that  character. 

The  power  to  coin  money  is,  therefore,  a  power  to  fabricate 
coins  out  of  metal  as  money,  and  thus  make  them  a  legal  ten 
der  for  their  declared  values  as  indicated  by  their  stamp.  If 
this  be  the  true  import  and  meaning  of  the  language  used,  it 
is  difficult  to  see  how  congress  can  make  the  paper  of  the  gov 
ernment  a  legal  tender.  When  the  constitution  says  that  con 
gress  shall  have  the  power  to  make  metallic  coins  a  legal 
tender,  it  declares  in  effect  that  it  shall  make  nothing  else  such 
tender.  The  affirmative  grant  is  here  a  negative  of  all  other 
power  over  the  subject. 

Besides  this,  there  cannot  well  be  two  different  standards  of 
value,  and  consequently  two  kinds  of  legal  tender  for  the  dis 
charge  of  obligations  arising  from  the  same  transactions.  The 
standard  or  tender  of  the  lower  actual  value  would  in  such 
case  inevitably  exclude  and  supersede  the  other,  for  no  one 
would  use  the  standard  or  tender  of  higher  value  when  his 


APPENDIX.  403 

purpose  could  be  equally  well  accomplished  by  the  use  of  the 
other.  A  practical  illustration  of  the  truth  of  this  principle 
we  have  all  seen  in  the  effect  upon  coin  of  the  act  of  congress 
making  the  notes  of  the  United  States  a  legal  tender.  It 
drove  coin  from  general  circulation,  and  made  it,  like  bullion, 
the  subject  of  sale  and  barter  in  the  market. 

The  inhibition  upon  the  states  to  coin  money  and  yet  to 
make  anything  but  gold  and  silver  coin  a  tender  in  payment 
of  debts,  must  be  read  in  connection  with  the  grant  of  the 
coinage  power  to  congress.  The  two  provisions  taken  together 
indicate  beyond  question  that  the  coins  which  the  national 
government  was  to  fabricate,-  and  the  foreign  coins,  the  valua 
tion  of  which  it  was  to  regulate,  were  to  consist  principally,  if 
not  entirely,  of  gold  and  silver. 

The  framers  of  the  constitution  were  considering  the  sub 
ject  of  money  to  be  used  throughout  the  entire  Union  when 
these  provisions  were  inserted,  and  it  is  plain  that  they  in- 
tentended  by  them  that  metallic  coins  fabricated  by  the  na 
tional  government,  or  adopted  from  abroad  by  its  authority, 
composed  of  the  precious  metals,  should  everywhere  be  the 
standard  and  the  only  standard  of  value  by  which  exchanges 
could  be  regulated  and  payments  made. 

At  that  time  gold  and  silver  moulded  into  forms  convenient 
for  use  and  stamped  with  their  value  by  public  authority,  con 
stituted,  with  the  exception  of  pieces  of  copper  for  small 
values,  the  money  of  the  entire  civilized  world.  Indeed  these 
metals  divided  up  and  thus  stamped  always  have  constituted 
money  with  all  people  having  any  civilization,  from  the  earliest 
periods  in  the  history  of  the  world  down  tofcthe  present  time. 
It  was  with  "four  hundred  shekels  of  silver,  current  money 
with  the  merchant,"  that  Abraham  bought  the  field  of  Mach- 
pelah,  nearly  four  thousand  years  ago.  This  adoption  of  the 
precious  metals  as  the  subject  of  coinage, — the  material  of 
money  by  all  peoples  in  all  ages  of  the  world, — has  not  been 
the  result  of  any  vagaries  of  fancy,  but  is  attributable  to  the 
fact  that  they  of  all  metals  alone  possess  the  properties  which 
are  essential  to  a  circulating  medium  of  uniform  value. 

"  The  circulating  medium  of  a  commercial  community," 
says  Mr.  "Webster,  "  must  be  that  which  is  also  the  circulating 


404  MONOPOLIES   AND   THE    PEOPLE. 

medium  of  other  commercial  communities,  or  must  be  capable 
of  being  converted  into  that  medium  without  loss.  It  must 
also  be  able  not  only  to  pass  in  payments  and  receipts  among 
individuals  of  the  same  society  and  nation,  but  to  adjust  and 
discharge  the  balance  of  exchanges  between  different  nations. 
It  must  be  something  which  has  a  value  abroad  as  well  as  at 
home,  by  which  foreign  as  well  as  domestic  debts  can  be  satis 
fied.  The  precious  metals  alone  answer  these  purposes.  They 
alone,  therefore,  are  money,  and  whatever  else  is  to  perform 
the  functions  of  money  must  be  their  representative  and  capa 
ble  of  being  turned  into  them  at  will.  So  long  as  bank  paper 
retains  this  quality  it  is  a  substitute  for  money.  Divested  of 
this  nothing  can  give  it  that  character." 

The  statesmen  who  framed  the  constitution  understood  this 
principle  as  well  as  it  is  understood  in  our  day.  They  had 
seen  in  the  experience  of  the  Revolutionary  period  the  demor 
alizing  tendency,  the  cruel  injustice,  and  the  intolerable  op 
pression  of  a  paper  currency  not  convertible  on  demand  into 
money,  and  forced  into  circulation  by  legal  tender  provisions 
and  penal  enactments.  When  they  therefore  were  construct 
ing  a  government  for  a  country,  which  they  could  not  fail  to 
see  was  destined  to  be  a  mighty  empire,  and  have  commercial 
relations  with  all  nations,  a  government  which  they  believed 
was  to  endure  for  ages,  they  determined  to  recognize  in  the 
fundamental  law  as  the  standard  of  value,  that  which  ever  has 
been  and  always  must  be  recognized  by  the  world  as  the  true 
standard,  and  thus  facilitate  commerce,  protect  industry,  estab 
lish  justice,  and  prevent  the  possibility  of  a  recurrence  of  the 
evils  which  they  had  experienced  and  the  perpetration  of  the 
injustice  which  they  had  witnessed.  "  We  all  know,"  says 
Mr.  Webster,  "  that  the  establishment  of  a  sound  and  uniform 
currency  was  one  of  the  greatest  ends  contemplated  in  the 
adoption  of  the  present  constitution.  If  we  could  now  fully 
explore  all  the  motives  of  those  who  framed  and  those  who 
supported  that  constitution,  perhaps  we  should  hardly  find  a 
more  powerful  one  than  this." 

And  how  the  framers  of  the  constitution  endeavored  to 
establish  this  " sound  and  uniform  currency"  we  have  already 
seen  in  the  clauses  which  they  adopted  providing  for  a  cur- 


APPENDIX.  405 

rency  of  gold  and  silver  coins.  Their  determination  to  sanc 
tion  only  a  metallic  currency  is  further  evident  from  the  de 
bates  iu  the  convention  upon  the  proposition  to  authorize 
congress  to  emit  bills  on  the  credit  of  the  United  States.  By 
bills  of  credit,  as  the  terms  were  then  understood,  were  meant 
paper  issues,  intended  to  circulate  through  the  community  for 
its  ordinary  purposes  as  money,  bearing  upon  their  face  the 
promise  of  the  government  to  pay  the  sums  specified  thereon 
at  a  future  day.  The  original  draft  contained  a  clause  giving 
congress  power  to  "  borrow  money  and  emit  bills  on  the  credit 
of  the  United  States,"  and  when  the  clause  came  up  for  con 
sideration,  Mr.  Morris  moved  to  strike  out  the  words  "and 
emit  bills  on  the  credit  of  the  United  States,"  observing  that 
"  if  the  United  States  had  credit,  such  bills  would  be  unneces 
sary;  if  they  had  not,  unjust  and  useless."  Mr.  Madison  in 
quired  whether  it  would  not  be  "  sufficient  to  prohibit  the 
making  them  a  legal  tender."  "  This  will  remove,"  he  said, 
"the  temptation  to  emit  them  with  unjust  views,  and  promis 
sory  notes  in  that  shape  may  in  some  emergencies  be  best." 
Mr.  Morris  replied  that  striking  out  the  words  would  still 
leave  room  for  "  notes  of  a  responsible  minister,"  which  would 
do  "  all  the  good  without  the  mischief."  Mr.  Gorham  was  for 
striking  out  the  words  without  inserting  any  prohibition.  If 
the  words  stood,  he  said,  they  might  "  suggest  and  lead  to  the 
measure,"  and  that  the  power,  so  far  as  it  was  necessary  or 
safe,  was  "  involved  in  that  of  borrowing."  Mr.  Mason  said 
he  was  unwilling  "  to  tie  the  hands  of  congress,"  and  thought 
congress  "  would  not  have  the  power  unless  it  were  expressed." 
Mr.  Ellsworth  thought  it  "  a  favorable  moment  to  shut  and 
bar  the  door  against  paper  money."  "  The  mischiefs,"  he 
said,  "  of  the  various  experiments  which  had  been  made  were 
now  fresh  in  the  public  mind  and  had  excited  the  disgust  of 
all  the  respectable  part  of  America.  By  withholding  the 
power  from  the  new  government,  more  friends  of  influence 
would  be  gained  to  it  than  by  almost  anything  else.  Paper 
money  can  in  no  case  be  necessary.  Give  the  government 
credit,  and  other  resources  will  offer.  The  power  may  do 
harm,  never  good."  Mr.  Wilson  thought  that  "it  would  have 
a  most  salutary  influence  on  the  credit  of  the  United  States  to 


406  MONOPOLIES    AND   THE    PEOPLE. 

remove  the  possibility  of  paper  money."  "This  expedient," 
he  said,  "can  never  succeed  whilst  its  mischiefs  are  remem 
bered,  and  as  long  as  it  can  be  resorted  to  it  will  be  a  bar  to 
other  resources."  Mr.  Butler  was  urgent  for  disarming  the 
government  of  such  a  power,  and  remarked  "that  paper  was 
a  legal  tender  in  no  country  in  Europe."  Mr.  Mason  replied 
that  if  there  was  no  example  in  Europe  there  was  none  in 
which  the  government  was  restrained  on  this  head,  and  he  was 
averse  "to  tying  up  the  hands  of  the  legislature  altogether." 
Mr.  Langdon  preferred  to  reject  the  whole  plan  than  retain 
the  words. 

Of  those  who  participated  in  the  debates,  only  one,  Mr.  Mer 
cer,  expressed  an  opinion  favorable  to  paper  money,  and  none 
suggested  that  if  congress  were  allowed  to  issue  the  bills  their 
acceptance  should  be  compulsory — that  is,  that  they  should 
be  made  a  legal  tender.  But  the  words  were  stricken  out  by 
a  vote  of  nine  states  to  two.  Virginia  voted  for  the  motion, 
and  Mr.  Madison  has  appended  a  note  to  the  debates,  stating 
that  her  vote  was  occasioned  by  his  acquiescence,  and  that  he 
"became  satisfied  that  striking  out  the  words  would  not  dis 
able  the  government  from  the  use  of  public  notes,  as  far  as 
they  could  be  safe  and  proper;  and  would  only  cut  off  the  pre 
text  for  a  paper  currency  and  particularly  for  making  the  bills  a 
tender  either  for  public  or  private  debts." 

If  anything  is  manifest  from  these  debates  it  is  that  the 
members  of  the  convention  intended  to  withhold  from  congress 
the  power  to  issue  bills  to  circulate  as  money — that  is,  to  be 
receivable  in  compulsory  payment,  or,  in  other  words,  having 
the  quality  of  legal  tender — and  that  the  express  power  to  is 
sue  the  bills  was  denied,  under  an  apprehension  that  if  granted 
it  would  give  a  pretext  to  congress,  under  the  idea  of  declar 
ing  their  effect,  to  annex  to  them  that  quality.  The  issue  of 
notes  simply  as  a  means  of  borrowing  money,  which  of  course 
would  leave  them  to  be  received  at  the  option  of  parties,  does 
not  appear  to  have  been  seriously  questioned.  The  circulation 
of  notes  thus  issued  as  a  voluntary  currency  and  their  receipt 
in  that  character  in  payment  of  taxes,  duties,  and  other  public 
expenses,  was  not  subject  to  the  objections  urged. 

I  am  aware  of  the  rule  that  the  opinions  and  intentions  of 


APPENDIX.  407 

individual  members  of  the  convention,  as  expressed  in  its  de 
bates  and  proceedings,  are  not  to  control  the  construction  of 
the  plain  language  of  the  constitution  or  narrow  down  the 
powers  which  that  instrument  confers.  Members,  it  is  said, 
who  did  not  participate  in  the  debate  may  have  entertained 
different  views  from  those  expressed.  The  several  state  }cou- 
ventions  to  which  the  constitution  was  submitted  may  have 
differed  widely  from  each  other  and  from  its  framers  in  their 
interpretation  of  its  clauses.  We  all  know  that  opposite  opin 
ions  on  many  points  were  expressed  in  the  conventions,  and 
conflicting  reasons  were  urged  both  for  the  adoption  and  the 
rejection  of  that  instrument.  All  this  is  very  true,  but  it  does 
not  apply  in  the  present  case,  for  on  the  subject  now  under 
consideration  there  was  everywhere,  in  the  several  state  con 
ventions  and  in  the  discussions  before  the  people,  an  entire 
uniformity  "of  opinion,  so  far  as  we  have  any  record  of  its  ex 
pression,  and  that  concurred  with  the  intention  of  the  conven 
tion,  as  disclosed  by  its  debates,  that  the  constitution  withheld 
from  congress  all  power  to  issue  bills  to  circulate  as  money, 
meaning  by  that  bills  made  receivable  in  compulsory  payment, 
or,  in  other  words,  having  the  quality  of  legal  tender.  Every 
one  appears  to  have  understood  that  the  power  of  making  pa 
per  issues  a  legal  tender,  by  congress  or  by  the  states,  was  ab 
solutely  and  forever  prohibited. 

Mr.  Luther  Martin,  a  member  of  the  convention,  in  his 
speech  before  the  Maryland  legislature,  as  reported  in  his  let 
ter  to  that  body,  states  the  arguments  urged  against  depriving 
congress  of  the  power  to  emit  bills  of  credit,  and  then  says 
that  a  "majority  of  the  convention,  being  wise  beyond  every 
event,  and  being  willing  to  risk  any  political  evil  rather  than 
admit  the  idea  of  a  paper  emission  in  any  possible  case,  refused 
to  trust  this  authority  to  a  government  to  which  they  were  lav 
ishing  the  most  unlimited  powers  of  taxation  and  to  the  mercy 
of  which  they  were  willing  blindly  to  trust  the  liberty  and 
property  of  the  citizens  of  every  state  in  the  Union,  and  they 
erased  that  clause  from  the  system." 

Not  only  was  this  construction  given  to  the  constitution  by 
its  framers  and  the  people  in  their  discussions  at  the  time  it 
was  pending  before  them,  but  until  the  passage  of  the  act  of 


408  MONOPOLIES    AND    THE    PEOPLE. 

1862,  a  period  of  nearly  three-quarters  of  a  century,  the  sound 
ness  of  this  construction  was  never  called  in  question  by  any 
legislation  of  congress  or  the  opinion  of  any  judicial  tribunal. 
Numerous  acts,  as  already  stated,  were  passed  during  this  pe 
riod,  authorizing  the  issue  of  notes  for  the  purpose  of  raising 
funds  or  obtaining  supplies,  but  in  none  of  them  was  the  ac 
ceptance  of  the  notes  made  compulsory.  Only  one  instance 
have  I  been  able  to  find  in  the  history  of  congressional  pro 
ceedings  where  it  was  even  suggested  that  it  was  within  the 
competency  of  congress  to  annex  to  the  notes  the  quality  of 
legal  tender,  and  this  occurred  in  1814.  The  government  was 
then  greatly  embarrassed  from  the  want  of  funds  to  continue 
the  war  existing  with  Great  Britain,  and  a  member  from 
Georgia  introduced  into  the  house  of  representatives  several 
resolutions  directing  an  inquiry  into  the  expediency  of  author 
izing  the  secretary  of  the  '.treasury  to  issue  notes  convenient 
for  circulation  and  making  provision  for  the  purchase  of  sup 
plies  in  each  state.  Among  the  resolutions  was  one  declaring 
that  the  notes  to  be  issued  should  be  a  legal  tender  for  debts 
due  or  subsequently  becoming  due  between  citizens  of  the 
United  States  and  between  citizens  and  foreigners.  The  house 
agreed  to  consider  all  the  resolutions  but  the  one  containing 
the  legal  tender  provision.  That  it  refused  to  consider  by  a 
vote  of  more  than  two  to  one. 

As  until  the  act  of  1862  there  was  no  legislation  making  the 
acceptance  of  notes  issued  on  the  credit  of  the  United  States 
compulsory,  the  construction  of  the  clause  of  the  constitution 
containing  the  grant  of  the  coinage  power  never  came  directly 
before  this  court  for  consideration,  and  the  attention  of  the 
court  was  only  incidentally  drawn  to  it.  But  whenever  the 
court  spoke  on  the  subject,  even  incidentally,  its  voice  was  in 
entire  harmony  with  that  of  the  convention. 

Thus,  in  Gwin  v.  Breedlove,  where  a  marshal  of  Mississippi, 
commanded  to  collect  a  certain  amount  of  dollars  on  execu 
tion,  received  the  amount  in  bank  notes,  it  was  held  that  he 
was  liable  to  the  plaintiff  in  gold  and  silver.  uBy  the  consti 
tution  of  the  United  States,"  said  the  court,  "gold  or  silver 
coin  made  current  by  law  can  only  be  tendered  in  payment  of 
debts/' 


APPENDIX.  409 

And  in  the  case  of  the  United  States  v.  Marigold,  where  the 
question  arose  whether  congress  had  power  to  enact  certain 
provisions  of  law  for  the  punishment  of  persons  bringing  into 
the  United  States  counterfeit  coin  with  intent  to  pass  it,  the 
court  said  :  These  provisions  "  appertain  to  the  execution  of 
an  important  trust  invested  by  the  constitution,  and  to  the  ob 
ligation  to  fulfil  that  trust  on  the  part  of  the  government, 
namely,  the  trust  and  the  duty  of  creating  and  maintaining  a 
uniform  and  pure  metallic  standard  of  value  throughout  the 
Union.  The  power  of  coining  money  and  of  regulating  its 
value  was  delegated  to  congress  by  the  constitution  for  the 
very  purpose,  as  assigned  by  the  framers  of  that  instrument,  of 
creating  and  preserving  the  uniformity  and  purity  of  such  a 
standard  of  value,  and  on  account  of  the  impossibility  which 
was  foreseen  of  otherwise  preventing  the  inequalities  and  the 
confusion  necessarily  incident  to  different  views  of  policy, 
which  in  different  communities  would  be  brought  to  bear  on 
this  subject.  The  power  to  coin  money  being  thus  given  to 
congress,  founded  on  public  necesity,  it  must  carry  with  it  the 
correlative  power  of  protecting  the  creature  and  object  of  that 
power." 

It  is  difficult  to  perceive  how  the  trust  and  duty  here  desig 
nated,  of  u  creating  and  maintaining  a  uniform  and  metallic 
standard  of  value  throughout  the  Union,"  is  discharged,  when 
another  standard  of  lower  value  and  fluctuating  character  is 
authorized  by  law,  which  necessarily  operates  to  drive  the 
first  from  circulation. 

In  addition  to  all  the  weight  of  opinion  I  have  mentioned 
we  have,  to  the  same  purport,  from  the  adoption  of  the  consti 
tution  up  to  the  passage  of  the  act  of  1862,  the  united  testimo 
ny  of  the  leading  statesmen  and  jurists  of  the  country.  Of  all 
the  men  who,  during  that  period,  participated  with  any  dis 
tinction  in  the  councils  of  the  nation,  not  one  can  be  named 
who  ever  asserted  any  different  power  in  congress  than  what 
I  have  mentioned.  As  observed  by  the  chief  justice,  states 
men  who  disagreed  widely  on  other  points  agreed  on  this. 

Mr.  Webster,  who  has  always  been  regarded  by  a  large  por 
tion  of  his  countrymen  as  one  of  the  ablest  and  most  enlight 
ened  expounders  of  the  constitution,  did  not  seem  to  think 
51 


410  MONOPOLIES   AND   THE    PEOPLE. 


e  was  any  doubt  on  the  subject,  although  he  belonged  to 
the  class  who  advocated  the  largest  exercise  of  powers  by  the 
general  government.  From  his  first  entrance  into  public  life, 
in  1812,  he  gave  great  consideration  to  the  subject  of  the  cur 
rency,  and  in  an  elaborate  speech  in  the  senate,  in  1836,  he 
said  :  "  Currency,  in  a  large  and  perhaps  just  sense,  includes 
not  only  gold  and  silver  and  bank  bills,  but  bills  of  exchange 
also.  It  may  include  all  that  adjusts,  exchanges,  and  settles 
balances  in  the  operations  of  trade  and  business  :  but  if  we  un 
derstand  by  currency  the  legal  money  of  the  county,  and  that 
which  constitutes  a  lawful  tender  for  debts,  and  is  the  statute 
measure  of  value,  then  undoubtedly  nothing  is  included  but 
gold  and  silver.  Most  unquestionably  there  is  no  legal  tender, 
and  there  can  be  no  legal  tender  in  this  country,  under  the 
authority  of  this  government  or  any  other,  but  gold  and  silver 
—  either  the  coinage  of  our  own  mints  or  foreign  coins,  at  rates 
regulated  by  congress.  This  is  a  constitutional  principle  per 
fectly  plain,  and  of  the  very  highest  importance.  The  states 
are  expressly  prohibited  from  making  anything  but  gold  and 
silver  a  tender  in  payment  of  debts,  and,  although  no  such  ex 
press  prohibition  is  applied  to  congress,  yet,  as  congress  has 
no  power  granted  to  it  in  this  respect  but  to  coin  money,  and 
to  regulate  the  value  of  foreign  coins,  it  clearly  has  no  power 
to  substitute  paper,  or  anything  else,  for  coin,  as  a  tender  in 
payment  of  debts  and  in  discharge  of  contracts.  Congress  has 
exercised  this  power  fully  in  both  its  branches.  It  has  coined 
money,  and  still  coins  it  :  it  has  regulated  the  value  of  foreign 
coins,  and  still  regulates  their  value.  The  legal  tender,  there 
fore,  the  constitutional  standard  of  value,  is  established  and 
cannot  be  overthrown.  To  overthrow  it  would  shake  the 
whole  system." 

If,  now,  we  consider  the  history  of  the  times  when  the  con 
stitution  was  adopted  ;  the  inter  tions  of  the  framers  of  that 
instrument,  as  shown  in  their  debates  ;  the  contemporaneous 
exposition  of  the  coinage  power  in  the  state  conventions  assem 
bled  to  consider  the  constitution,  and  in  the  public  discussions 
before  the  people  ;  the  natural  meaning  of  the  terms  used  ;  the 
nature  of  the  constitution  itself  as  creating  a  government  of 
enumerated  powers  ;  the  legislative  exposition  of  nearly  three- 


APPENDIX.  411 

quarters  of  a  century ;  the  opinions  of  judicial  tribunals,  and 
the  recorded  utterances  of  statesmen,  jurists,  and  commenta 
tors,  it  would  seem  impossible  to  doubt  that  the  only  standard 
of  value  authorized  by  the  constitution  was  to  consist  of  me 
tallic  coins  struck  or  regulated  by  the  directioh  of  congress, 
and  that  the  power  to  establish  any  other  standard  was  denied 
by  that  instrument. 

There  are  other  considerations  besides  those  I  have  stated, 
which  are  equally  convincing  against  the  constitutionality  of 
the  legal  tender  provision  of  the  act  of  February  25th,  1862,  so 
far  as  it  applies  to  private  debts  and  debts  by  the  government 
contracted  previous  to  its  passage.  That  provision  operates 
directly  to  impair  the  obligation  of  such  contracts.  In  the  dis 
senting  opinion,  in  the  case  of  Hepburn  v.  Griswold,  this  is  ad 
mitted  to  be  its  operation,  and  the  position  is  taken  that,  while 
the  constitution  forbids  the  states  to  pass  such  laws,  it  does 
not  forbid  congress  to  do  this,  and  the  power  to  establish  a 
uniform  system  of  bankruptcy,  which  is  expressly  conferred, 
is  mentioned  in  support  of  the  position.  In  some  of  the  opin 
ions  of  the  state  courts,  to  which  our  attention  has  been  direct 
ed,  it  is  denied  that  the  provision  in  question  impairs  the  obli 
gation  of  previous  contracts,  it  being  asserted  that  a  contract 
to  pay  money  is  satisfied,  according  to  its  meaning,  by  the 
payment  of  that  which  is  money  when  the  payment  is  made, 
and  that  if  the  law  does  not  interfere  with  this  mode  of  satis 
faction,  it  does  not  impair  the  obligation  of  the  contract.  This 
position  is  true  so  long  as  the  term  money  represents  the  same 
thing  in  both  cases  or  their  actual  equivalents,  but  it  is  not 
true  when  the  term  has  different  meanings.  Money  is  a 
generic  term,  and  contracts  for  money  are  not  made  without  a 
specification  of  the  coins  or  denominations  of  money,  and  the 
number  of  them  intended,  as  eagles,  dollars,  or  cents;  and 
it  will  not  be  pretended  that  a  contract  for  a  specified  number 
of  eagles  can  be  satisfied  by  a  delivery  of  an  equal  number  of 
dollars,  although  both  eagles  and  dollars  are  money;  nor 
would  it  thus  be  contended,  though  at  the  time  the  contract 
matured  the  legislature  had  determined  to  call  dollars  eagles. 
Contracts  are  made  for  things,  not  names  or  sounds,  and  the 


412  MONOPOLIES   AND   THE    PEOPLE. 

obligation  of  a  contract  arises  from  its  terms  and  the  means 
which  the  law  affords  for  its  enforcement. 

A  law  which  changes  the  terms  of  the  contract,  either  in  the 
time  or  mode  of  performance,  or  imposes  new  conditions,  or 
dispenses  with  those  expressed,  or  authorizes  for  its  satisfac 
tion  something  different  from  that  provided,  is  a  law  which  im 
pairs  its  obligation,  for  such  a  law  relieves  the  parties  from 
the  moral  duty  of  performing  the  original  stipulations  of  the 
contract,  and  it  prevents  their  legal  enforcement. 

The  notion  that  contracts  for  the  payment  of  money  stand 
upon  any  different  footing  in  this  respect  from  other  contracts 
appears  to  have  had  its  origin  in  certain  old  English  cases, 
particularly  that  of  mixed  money,  which  were  decided  upon 
the  force  of  the  prerogative  of  the  king  with  respect  to  coin, 
and  have  no  weight  as  applied  to  powers  possessed  by  congress 
under  our  constitution.  The  language  of  Mr.  Chief  Justice 
Marshall  in  Faw  v.  Marstdler,  which  is  cited  in  support  of  this 
notion,  can  only  be  made  to  express  concurrence  with  it  when 
detached  from  its  context  and  read  separated  from  the  facts  in 
reference  to  which  it  was  used. 

It  is  obvious  that  the  act  of  1862  changes  the  terms  of  con 
tracts  for  the  payment  of  money  made  previous  to  its  passage, 
in  every  essential  particular.  All  such  contracts  had  reference 
to  metallic  coins,  struck  or  regulated  by  congress,  and  com 
posed  principally  of  gold  and  silver,  which  constituted  the 
legal  money  of  the  country.  The  several  coinage  acts  had 
fixed  the  weight,  purity,  forms,  impressions,  and  denomina 
tions  of  these  coins,  and  had  provided  that  their  value  should 
be  certified  by  the  form  and  impress  which  they  received  at 
the  mint. 

They  had  established  the  dollar  as  the  money  unit,  and  pre 
scribed  the  grains  of  silver  it  should  contain,  and  the  grains  of 
gold  which  should  compose  the  different  gold  coins.  Every 
dollar  was  therefore  a  piece  of  gold  or  silver  certified  to  be  of 
a  specified  weight  and  purity,  by  its  form  and  impress.  A 
contract  to  pay  a  specified  number  of  dollars  was  then  a  con 
tract  to  deliver  the  designated  number  of  pieces  of  gold  or  sil 
ver  of  this  character  ;  and,  by  the  laws  of  congress  and  of  the 


APPENDIX.  413 

several  states  the  delivery  of  such  dollars  could  be  enforced  by 
the  holder. 

The  act  of  1862  changes  all  this ;  it  declares  that  gold  or 
silver  dollars  need  not  be  delivered  to  the  creditor  according 
to  the  stipulations  of  the  contract;  that  they  need  not  be  de 
livered  at  all ;  that  promises  of  the  United  States,  with  which 
the  creditor  has  had  no  relations,  to  pay  these  dollars,  at  some 
uncertain  future  day,  shall  be  received  in  discharge  of  the 
contracts  —  in  other  words,  that  the  holder  of  such  contracts 
shall  take  in  substitution  for  them  different  contracts  with  an 
other  party,  less  valuable  to  him,  and  surrender  the  original. 

Taking  it,  therefore,  for  granted  that  the  law  plainly  impairs 
the  obligation  of  such  contracts,  I  proceed  to  inquire  whether 
it  is  for  that  reason,  subject  to  any  constitutional  objection. 
In  the  dissenting  opinion  in  Hepburn  v.  Griswold,  it  is  said,  as 
already  mentioned,  that  the  constitution  does  i:ot  forbid  legis 
lation  impairing  the  obligation  of  contracts. 

It  is  true  there  is  no  provision  in  the  constitution  forbidding 
in  express  terms  such  legislation.  And  it  is  also  true  that 
there  are  express  powers  delegated  to  congress,  the  execution 
of  which  necessarily  operates  to  impair  the  obligation  of  con 
tracts.  It  was  the  object  of  the  frarners  of  that  instrument  to 
create  a  national  government  competent  to  represent  the  entire 
country  in  its  relations  with  foreign  nations,  and  to  accomplish 
by  its  legislation  measures  of  common  interest  to  all  the  peo 
ple,  which  the  several  states,  in  their  independent  capacities, 
were  incapable  of  effecting,  or  if  capable,  the  execution  of 
which  would  be  attended  with  great  difficulty  and  embarrass 
ment.  They,  therefore,  clothed  congress  with  all  the  powers 
essential  to  the  successful  accomplishment  of  these  ends,  and 
carefully  withheld  the  grant  of  all  other  powers.  Some  of  the 
powers  granted,  from  their  very  nature,  interfere  in  their  exe 
cution  with  contracts  of  parties.  Thus  war  suspends  intercourse 
and  commerce  between  citizens  or  subjects  of  belligerent  na 
tions  ;  it  renders,  during  its  continuance,  the  performance  of 
contracts  previously  made  unlawful.  These  incidental  conse 
quences  were  contemplated  in  the  grant  of  the  war  power.  So 
the  regulation  of  commerce  and  the  imposition  of  duties  may 
so  affect  the  prices  of  articles  imported  or  manufactured  as 


414  MONOPOLIES   AND   THE    PEOPLE. 

to  essentially  alter  the  value  of  previous  contracts  respecting 
them;  but  this  incidental  consequence  was  seen  in  the  grant 
of  the  power  over  commerce  and  duties.  There  can  be  no 
valid  objection  to  laws  passed  in  execution  of  express  powers 
that  consequences  like  these  follow  incidentally  from  their  ex 
ecution.  But  it  is  otherwise  when  such  consequences  do  not 
follow  incidentally,  but  are  directly  enacted. 

The  only  express  authority  for  any  legislation  affecting  the 
obligation  of  contracts  is  found  in  the  power  to  establish  a 
uniform  system  of  bankruptcy,  the  direct  object  of  which  is  to 
release  insolvent  debtors  from  their  contracts  upon  the  surren 
der  of  their  property.  From  this  express  grant  in  the  consti 
tution  I  draw  a  very  different  conclusion  from  that  drawn  in 
the  dissenting  opinion  in  Hepburn  v.  Griswold,  and  in  the 
opinion  of  the  majority  of  the  court  just  delivered.  To  my 
mind  it  is  a  strong  argument  that  there  is  no  general  power  in 
congress  to  interfere  with  contracts — that  a  special  grant  was 
regarded  as  essential  to  authorize  a  uniform  system  of  bank 
ruptcy.  If  such  general  power  existed,  the  delegation  of  an 
express  power  in  the  case  of  bankrupts  was  unnecessary.  As 
very  justly  observed  by  counsel,  if  this  sovereign  power  could 
be  taken  in  any  case  without  express  grant,  it  could  be  taken 
in  connection  with  bankruptcies,  which  might  be  regarded  in 
some  respects  as  a  regulation  of  commerce  made  in  the  interest 
of  traders. 

The  grant  of  a  limited  power  over  the  subject  of  contracts 
necessarily  implies  that  the  framers  of  the  constitution  did  not 
intend  that  congress  should  exercise  unlimited  power,  or  any 
power  less  restricted.  The  limitation  designated  is  the 
measure  of  congressional  power  over  the  subject.  This  fol 
lows  from  the  nature  of  the  instrument  as  one  of  enumerated 
powers. 

The  doctrine  that  where  a  power  is  not  expressly  forbidden 
it  may  be  exercised,  would  change  the  whole  character  of  our 
government.  As  I  read  the  writings  of  the  great  commenta 
tors  and  the  decisions  of  this  court,  the  true  doctrine  is  the  ex 
act  reverse,  that  if  a  power  is  not  in  terms  granted,  and  is  not 
necessary  and  proper  for  the  exercise  of  a  power  thus  granted, 
it  does  not  exist. 


APPENDIX.  415 

The  position  that  congress  possesses  some  undefined  power 
to  do  anything  which  it  may  deem  expedient,  as  a  resulting 
power  from  the  general  purposes  of  the  government,  which  is 
advanced  in  the  opinion  of  the  majority,  would  of  course  settle 
the  question  under  consideration  without  difficulty,  for  it  would 
end  all  controversy  by  changing  our  government  from  one  of 
enumerated  powers  to  one  resting  in  the  unrestrained  will  of 
congress. 

44  The  government  of  the  United  States,"  says  Mr.  Chief 
Justice  Marshall,  speaking  for  the  court  in  Martin  v.  Hunter's 
Lessee,  "  can  claim  no  powers  which  are  not  granted  to  it  by 
the  constitution,  and  the  powers  actually  granted  must  be  such 
as  are  expressly  given  or  given  by  necessary  implication." 
This  implication,  it  is  true,  may  follow  from  the  grant  of  sev 
eral  express  powers  as  well  as  from  one  alone,  but  the  power 
implied  must,  in  all  cases,  be  subsidiary  to  the  execution  of 
the  powers  expressed.  The  language  of  the  constitution  re 
specting  the  writ  of  habeas  corpus,  declaring  that  it  shall 
not  be  suspended  unless,  when  in  cases  of  rebellion  or  invasion, 
the  public  safety  may  require  it,  is  cited  as  showing  that  the 
power  to  suspend  such  writ  exists  somewhere  in  the  constitu 
tion;  and  the  adoption  of  the  amendments  is  mentioned  as 
evidence  that  important  powers  were  understood  by  the  peo 
ple  who  adopted  the  constitution  to  have  been  created  by  it, 
which  are  not  enumerated,  and  are  not  included  incidentally 
in  any  of  those  enumerated. 

The  answer  to  this  position  is  found  in  the  nature  of  the 
constitution,  as  one  of  granted  powers,  as  stated  by  Mr.  Chief 
Justice  Marshall.  The  inhibition  upon  the  exercise  of  a  speci 
fied  power  does  not  warrant  the  implication  that,  but  for  such 
inhibition,  the  power  might  have  been  exercised.  In  the  con 
vention  which  framed  the  constitution  a  proposition  to  appoint 
a  committee  to  prepare  a  bill  of  rights  was  unanimously  re 
jected,  and  it  has  been  always  understood  that  its  rejection  was 
upon  the  ground  that  such  a  bill  would  contain  various  excep 
tions  to  powers  not  granted,  and  on  this  very  account  would, 
afford  a  pretext  for  asserting  more  than  was  granted.  In  the 
discussions  before  the  people,  when  the  adoption  of  the  consti 
tution  was  pending,  no  objection  was  urged  with  greater  effect 


416  MONOPOLIES   AND  THE   PEOPLE. 

than  this  absence  of  a  bill  of  rights,  and  in  one  of  the  num 
bers  of  the  Federalist,  Mr.  Hamilton  endeavored  to  combat 
the  objection.  After  stating  several  reasons  why  such  a  bill 
was  not  necessary,  he  said :  "  I  go  further  and  affirm  that 
bills  of  rights,  in  the  sense  and  to  the  extent  they  are  con 
tended  for,  are  not  only  unnecessary  in  the  proposed  constitu 
tion,  but  would  even  be  dangerous.  They  would  contain 
various  exceptions  to  powers  not  granted,  and  on  this  very  ac 
count  would  afford  a  colorable  pretext  to  claim  more  than  were 
'granted.  For  why  declare  that  things  shall  not  be  done  which 
there  is  no  power  to  do  ?  Why,  for  instance,  should  it  be  said 
that  the  liberty  of  the  press  shall  not  be  restrained  when  no 
power  is  given  by  which  restrictions  may  be  imposed  ?  I  will 
not  contend  that  such  a  provision  would  confer  a  regulating 
power,  but  it  is  evident  that  it  would  furnish  to  men  disposed 
to  usurp  a  plausible  pretence  for  claiming  that  power.  They 
might  urge,  with  a  semblance  of  reason,  that  the  constitution 
ought  not  to  be  charged  with  the  absurdity  of  providing 
against  the  abuse  of  an  authority  which  was  not  given,  and 
that  the  provision  against  restraining  the  liberty  of  the  press 
afforded  a  clear  implication  that  a  right  to  prescribe  proper 
regulations  concerning  it  was  intended  to  be  vested  in  the  na 
tional  government.  This  may  serve  as  a  specimen  of  the 
numerous  handles  which  would  be  given  to  the  doctrine  of 
constructive  powers  by  the  indulgence  of  an  injudicious  zeal 
for  bills  of  right." 

When  the  amendments  were  presented  to  the  states  for 
adoption  they  were  preceded  by  a  preamble  stating  that  the 
conventions  of  a  number  of  the  states  had,  at  the  time  of  their 
adopting  the  constitution,  expressed  a  desire  "  in  order  to  pre 
vent  misconception  or  abuse  of  its  powers,  that  further  declara 
tory  and  restrictive  clauses  should  be  added." 

Now,  will  any  one  pretend  that  congress  could  have  made  a 
law  respecting  an  establishment  of  religion  or  prohibiting  the 
free  exercise  thereof,  or  abridging  the  freedom  of  speech,  or 
the  right  of  the  people  to  assemble  and  petition  the  govern 
ment  for  a  redress  of  grievances,  had  not  prohibitions  upon 
the  exercise  of  any  such  legislative  power  been  embodied  in 
an  amendment  ? 


APPENDIX.  417 

How  truly  did  Hamilton  say  that  had  a  bill  of  rights  been 
inserted  in  the  constitution,  it  would  have  given  a  handle  to 
the  doctrine  of  constructive  powers.  We  have  this  day  an 
illustration  in  the  opinion  of  the  majority  of  the  very  claim  of 
constructive  power  which  he  apprehended,  and  it  is  the  first 
instance,  I  believe,  in  the  history  of  this  court,  when  the 
possession  by  congress  of  such  constructive  power  has  been 
asserted. 

The  interference  with  contracts  by  the  legislation  of  the 
several  states  previous  to  the  adoption  of  the  constitution  was 
the  cause  of  great  oppression  and  injustice.  "  Not  only," 
says  Story,  "  was  paper  money  issued  and  declared  to  be  a 
tender  in  payment  of  debts,  but  laws  of  another  character, 
well  known  under  the  appellation  of  tender  laws,  appraise 
ment  laws,  instalment  laws,  and  suspension  laws,  were  from 
time  to  time  enacted,  which  prostrated  all  private  credit  and 
all  private  morals.  By  some  of 'these  laws  the  due  payment  of 
debts  was  suspended;  debts  were,  in  violation  of  the  very 
terms  of  the  contract,  authorized  to  be  paid  by  instalments  at 
different  periods;  property  of  any  sort,,  however  worthless, 
either  real  or  personal,  might  be  tendered  by  the  debtor  in 
payment  of  his  debts,  and  the  creditor  was  compelled  to  take 
the  property  of  the  debtor,  which  he  might  seize  on  execution, 
at  an  appraisement  wholly  disproportionate  to  its  known  value. 
Such  grievances  and  oppressions  and  others. of  a  like  nature 
were  the  ordinary  results  of  legislation  during  the  Revolution 
ary  war  and  the  intermediate  period  down  to  the  formation  of 
the  constitution.  They  entailed  the  most  enormous  evils  on 
the  country  and  introduced  a  system  of  fraud,  chicanery,  and 
profligacy,  which  destroyed  all  private  confidence  and  all  in 
dustry  and  enterprise." 

To  prevent  the  recurrence  of  evils  of  this  character  not  only 
was  the  clause  inserted  in  the  constitution  prohibiting  the 
states  from  issuing  bills  of  credit  and  making  anything  but 
gold  and  silver  a  tender  in  payment  of  debts,  but  also  the 
more  general  prohibition,  from  passing  any  law  impairing  the 
obligation  of  contracts.  "  To  restore  public  confidence  com 
pletely,"  says  Chief  Justice  Marshall,  "  it  was  necessary  not 
only  to  prohibit  the  use  of  particular  means  by  which  it  might 
52 


418  MONOPOLIES    AND   THE    PEOPLE. 

be  effected,  but  to  prohibit  the  use  of  any  means  by  which 
the  same  mischief  might  be  produced.  The  convention  ap 
pears  to  have  intended  to  establish  a  great  principle,  that  con 
tracts  should  be  inviolable." 

It  would  require  very  clear  evidence,  one  would  suppose,  to 
induce  a  belief  that  with  the  evils  resulting  from  what  Mar 
shall  terms  the  system  of  lax  legislation  following  the  Revolu 
tion,  deeply  impressed  on  their  minds,  the  framers  of  the 
constitution  intended  to  vest  in  the  new  government  created 
by  them  this  dangerous  and  despotic  power,  which  they  were 
unwilling  should  remain  with  the  states,  and  thus  widen  the 
possible  sphere  of  its  exercise. 

When  the  possession  of  this  power  has  been  asserted  in  ar 
gument  (for  until  now  it  has  never  been  asserted  in  any  decis 
ion  of  this  court),  it  has  been  in  cases  where  a  supposed  public 
benefit  resulted  from  the  legislation,  or  where  the  interference 
with  the  obligation  of  the  contract  was  very  slight.  When 
ever  a  clear  case  of  injustice,  in  the  absence  of  such  supposed 
public  good,  is  stated,  the  exercise  of  the  power  by  the  govern 
ment  is  not  only  denounced  but  the  existence  of  the  power  is 
denied.  No  one,  indeed,  is  found  bold  enough  to  contend  that 
if  A  has  a  contract  for  one  hundred  acres  of  land,  or  one  hun 
dred  pounds  of  fruit,  or  one  hundred  yards  of  cloth,  congress 
can  pass  a  law  compelling  him  to  accept  one-half  of  the  quan 
tity  in  satisfaction  of  the  contract.  But  congress  has  the  same 
power  to  establish  a  standard  of  weights  and  measures  as  it 
has  to  establish  a  standard  of  value,  and  can,  from  time  to  time, 
alter  such  standard.  It  can  declare  that  the  acre  shall  consist 
of  eighty  square  rods  instead  of  one  hundred  and  sixty,  the 
pound  of  eight  ounces  instead  of  sixteen,  and  the  foot  of  six 
inches  instead  of  twelve,  and  if  it  could  compel  the  acceptance 
of  the  same  number  of  acres,  pounds,  or  yards,  after  such  alter 
ation,  instead  of  the  actual  quantity  stipulated,  then  the  accept 
ance  of  one-half  of  the  quantity  originally  designated  could 
be  directly  required  without  going  through  the  form  of  alter 
ing  the  standard.  No  just  man  could  be  imposed  upon  by  this 
use  of  words  in  a  double  sense,  where  the  same  names  were 
applied  to  denote  different  quantities  of  the  same  thing,  nor 
would  his  condemnation  of  the  wrong  committed  in  such  case 


APPENDIX.  419 

be  withheld,  because  the  attempt  was  made  to  conceal  it  by 
this  jugglery  of  words. 

The  power  of  congress  to  interfere  with  contracts  for  the 
payment  of  money  is  not  greater  or  in  any  particular  different 
from  its  power  with  respect  to  contracts  for  lands  or  goods. 
The  contract  is  not  fulfilled  any  more  in  one  case  than  in  the 
other  by  the  delivery  of  a  thing  which  is  not  stipulated,  be 
cause  by  legislative  action  it  is  called  by  the  same  name. 
Words  in  contracts  are  to  be  construed  in  both  cases  in  the 
sense  in  which  they  were  understood  by  the  parties  at  the  time 
of  the  contract. 

Let  us  for  a  moment  see  where  the  doctrine  of  the  power 
asserted  will  lead.  Congress  has  the  undoubted  right  to  give 
such  denominations  as  it  chooses  to  the  coins  struck  by  its  au 
thority,  and  to  change  them.  It  can  declare  that  the  dime 
shall  hereafter  be  called  a  dollar,  or,  what  is  the  same  thing,  it 
may  declare  that  the  dollar  shall  hereafter  be  composed  of  the 
grains  of  silver  which  now  compose  the  dime.  But  would 
anybody  pretend  that  a  contract  for  dollars,  composed  as  at 
present,  could  be  satisfied  by  the  delivery  of  an  equal  number 
of  dollars  of  the  new  issue  ?  I  have  never  met  any  one  who 
would  go  to  that  extent.  The  answer  always  has  been  that 
would  be  too  flagrantly  unjust  to  be  tolerated.  Yet  enforcing 
the  acceptance  of  paper  promises  or  paper  dollars,  if  the  prom 
ises  can  be  so  called,  in  place  of  gold  or  silver  dollars,  is  equally 
enforcing  a  departure  from  the  terms  of  the  contract,  the  in 
justice  of  the  measure  depending  entirely  upon  the  actual  value 
at  the  time  of  the  promises  in  the  market.  Now  reverse  the 
case.  Suppose  congress  should  declare  that  hereafter  the  eagle 
should  be  called  a  dollar,  or  that  the  dollar  should  be  composed 
of  as  many  grains  of  gold  as  the  eagle,  would  anybody  for  a 
moment  contend  that  a  contract  for  dollars,  composed  as  now 
of  silver,  should  be  satisfied  by  dollars  composed  of  gold  ?  I 
am  confident  that  no  judge  sitting  on  this  bench,  and,  indeed, 
that  no  judge  in  Christendom  could  be  found  who  would  sanc 
tion  the  monstrous  wrong  by  decreeing  that  the  debtor  could 
only  satisfy  his  contract  in  such  case  by  paying  ten  times  the 
value  originally  stipulated.  The  natural  sense  of  right  which 
is  implanted  in  every  mind  would  revolt  from  such  supreme 


420  MONOPOLIES   AND    THE    PEOPLE. 

injustice.  Yet  there  cannot  be  one  law  for  debtors  and  an 
other  law  for  creditors.  If  the  contract  can  at  one  time  be 
changed  by  congressional  legislation  for  the  benefit  of  the 
debtor  it  may  at  another  time  be  changed  for  the  benefit  of 
the  creditor. 

For  acts  of  flagrant  injustice  such  as  those  mentioned  there 
is  no  authority  in  any  legislative  body,  even  though  not  re 
strained  by  any  express  constitutional  prohibition.  For  as 
there  are  unchangeable  principles  of  right  and  morality,  with 
out  which  society  would  be  impossible,  and  men  would  be  but 
wild  beasts  preying  upon  each  other,  so  there  are  fundamental 
principles  of  eternal  justice,  upon  the  existence  of  which  all 
constitutional  government  is  founded,  and  without  which  gov 
ernment  would  be  an  intolerable  and  hateful  tyranny.  There 
are  acts,  says  Mr.  Justice  Chase,  in  Caider  v.  Bull,  which  the 
federal  and  state  legislatures  cannot  do,  without  exceeding 
their  authority.  Among  these  he  mentions  a  law  which  pun 
ishes  a  citizen  for  an  innocent  action ;  a  law  that  destroys  or 
impairs  the  lawful  private  contracts  of  citizens;  a  law  that 
makes  a  man  a  judge  in  his  own  cause;  and  a  law  that  takes 
the  property  from  A  and  gives  it  to  B.  "It  is  against  all  rea 
son  and  right,"  says  the  learned  justice,  "for  a  people  to  in 
trust  a  legislature  with  such  powers ;  and  therefore  it  cannot 
be  presumed  that  they  have  done  it.  The  genius,  the  nature, 
and  the  spirit  of  our  state  governments  amount  to  a  prohibi 
tion  of  such  acts  of  legislation,  and  the  general  principles  of 
law  and  reason  forbid  them.  The  legislature  may  enjoin,  per 
mit,  forbid,  and  punish ;  they  may  declare  new  crimes,  and 
establish  rules  of  conduct  for  all  its  citizens  in  future  cases ; 
they  may  command  what  is  right  and  prohibit  what  is  wrong, 
but  they  cannot  change  innocence  into  guilt,  or  punish  inno 
cence  as  a  crime,  or  violate  the  rights  of  an  antecedent  lawful 
private  contract,  or  the  right  of  private  property.  To  main 
tain  that  our  federal  or  state  legislatures  possess  such  powers, 
if  they  had  not  been  expressly  restrained,  would,  in  my  opin 
ion,  be  a  political  heresy,  altogether  inadmissible  in  our  free 
republican  governments." 

In  Ogden  v.  Sounders,  Mr.  Justice  Thompson,  referring  to 
the  provisions  in  the  constitution  forbidding  the  states  to  pass 


APPENDIX.  421 

any  bill  of  attainder,  ex  post  facto  law,  or  law  impairing  the  ob 
ligation  of  contracts,  says:  "Neither  provision  can  strictly  be 
considered  as  introducing  any  new  principle,  but  only  for 
greater  security  and  safety  to  incorporate  into  this  charter  pro 
visions  admitted  by  all  to  be  among  the  first  principles  of  gov 
ernment.  No  state  court  would",  I  presume,  sanction  and  en 
force  an  ex  post  facto  law  if  no  such  prohibition  was  contained 
in  the  constitution  of  the  United  States ;  so,  neither  would  re 
trospective  laws,  taking  away  vested  rights,  be  enforced.  Such 
laws  are  repugnant  to  those  fundamental  principles  upon  which 
every  just  system  of  laws  is  founded.  It  is  an  elementary  prin 
ciple,  adopted  and  sanctioned  by  the  courts  of  justice  in*  this 
country  and  in  Great  Britain,  whenever  such  laws  have  come 
under  consideration,  and  yet  retrospective  laws  are  clearly 
within  this  prohibition." 

In  Wilkeson  v.  Leland,  Mr.  Justice  Story,  whilst  comment 
ing  upon  the  power  of  the  legislature  of  Rhode  Island  under 
the  charter  of  Charles  II.  said :  "  The  fundamental  maxims 
of  a  free  government  seem  to  require  that  the  rights  of  per 
sonal  liberty  and  private  property  should  be  held  sacred.  At 
least  no  court  of  justice  in  this  country  would  be  warranted 
in  assuming  that  the  power  to  violate  and  disregard  them,  a 
power  so  repugnant  to  the  common  principles  of  justice  and 
civil  liberty,  lurked  under  any  general  grant  of  legislative  au 
thority,  or  ought  to  be  implied  from  any  general  expressions 
of  the  will  of  the  people.  The  people  ought  not  to  be  pre 
sumed  to  part  with  rights  so  vital  to  their  security  and  well- 
being  Without  very  strong  and  direct  expressions  of  such  an 
intention." 

Similar  views  to  these  cited  from  the  opinions  of  Chase, 
Thompson,  Story,  and  Marshall,  are  found  scattered  through 
the  opinions  of  the  judges  who  have  preceded  us  on  this  bench. 
As  against  their  collective  force  the  remark  of  Mr.  Justice 
Washington,  in  the  case  of  Evans  v.  Eaton,  is  without  signifi 
cance.  That  was  made  at  nisi  prius  in  answer  to  a  motion  for 
a  nonsuit  in  an  action  brought  for  an  infringement  of  a  patent 
right.  The  state  of  Pennsylvania  had,  in  March  1787,  which 
was  previous  to  the  adoption  of  the  constitution,  given  to  the 
plaintiff  the  exclusive  right  to  make,  use,  and  vend  his  inven- 


422  MONOPOLIES   AND   THE    PEOPLE. 

tion  for  fourteen  years.  In  January,  1808,  the  United  States 
issued  to  him  a  patent  for  the  invention  for  fourteen  years 
from  that  date.  It  was  contended,  for  the  nonsuit,  that  after 
the  expiration  of  the  plaintiff's  privilege  granted  by  the  state, 
the  right  to  his  invention  became  invested  in  the  people  of  the 
state,  by  an  implied  contract  with  the  government,  and,  there 
fore,  that  congress  could  not  consistently  with  the  constitu 
tion  grant  to  the  plaintiff  an  exclusive  right  to  the  invention. 
The  court  replied  that  neither  the  premises  upon  which  the 
motion  was  founded,  nor  the  conclusion,  could  be  admitted; 
that  it  was  not  true  that  the  grant  of  an  exclusive  privilege  to 
an  invention  for  a  limited  time  implied  a  binding  and  irrevo 
cable  contract  with  the  people  that  at  the  expiration  of  the  pe 
riod  limited  the  invention  should  become  their  property ;  and 
that  even  if  the  premises  were  true,  there  was  nothing  in  the 
constitution  which  forbade  congress  to  pass  laws  violating  the 
obligation  of  contracts. 

The  motion  did  not  merit  any  consideration,  as  the  federal 
court  had  no  power  to  grant  a  nonsuit  against  the  will  of  the 
plaintiff  in  any  case.  The  expression  under  these  circum 
stances  of  any  reason  why  the  court  would  not  grant  the  mo 
tion,  if  it  possessed  the  power,  was  aside  the  case,  and  is  not, 
therefore,  entitled  to  any  weight  whatever  as  authority.  It 
was  true,  however,  as  observed  by  the  court,  that  no  such  con 
tract  with  the  public,  as  stated,  was  implied,  and  inasmuch  as 
congress  was  expressly  authorized  by  the  constitution  to  secure 
for  a  limited  time  to  inventors  the  exclusive  right  to  their  dis 
coveries,  it  had  the  power  in  that  way  to  impair  the  obligation 
of  such  a  contract,  if  any  had  existed.  And  this  is  perhaps, 
all  that  Mr.  Justice  Washington  meant.  It  is  evident  from 
his  language  in  Ogden  v.  Saunders,  that  he  repudiated  the  ex 
istence  of  any  general  power  in  congress  to  destroy  or  impair 
vested  private  rights. 

What  I  have  heretofore  said  respecting  the  power  of  con 
gress  to  make  the  notes  of  the  United  States  a  legal  tender  in 
payment  of  debts  contracted  previous  to  the  act  of  1862,  and 
to  interfere  with  contracts,  has  had  reference  to  debts  and 
contracts  between  citizens.  But  the  same  power  which  is  as 
serted  over  these  matters  is  also  asserted  with  reference  to 


APPENDIX.  423 

previous  debts  owing  by  the  government,  and  must  equally 
apply  to  contracts  between  the  government  and  the  citizen. 
The  act  of  1862  declares  that  the  notes  issued  shall  be  a  legal 
tender  in  payment  of  all  debts,  public  and  private,  with  the  ex 
ception  of  duties  on  imports  and  interest  on  the  public  debt. 
If  they  are  a  legal  tender  for  antecedent  private  debts,  they 
are  also  a  legal  tender  for  such  debts  owing  by  the  United 
States,  except  in  the  cases  mentioned.  That  any  exception  was 
made  was  a  mere  matter  of  legislative  discretion.  Express 
contracts  for  the  payment  of  gold  or  silver  have  been  main 
tained  by  this  court,  and  specifically  enforced  on  the  ground 
that,  upon  a  proper  construction  of  the  act  of  1862,  in  connec 
tion  with  other  acts,  congress  intended  to  except  these  con 
tracts  from  the  operation  of  the  legal  tender  provision.  But 
the  power  covers  all  cases  if  it  exists  at  all.  The  power  to 
make  the  notes  of  the  United  States  the  legal  equivalent 
to  gold  and  silver  necessarily  includes  the  power  to  cancel 
with  them  specific  contracts  for  gold  as  well  as  money  con 
tracts  generally.  Before  the  passage  of  the  act  of  1862,  there 
was  no  legal  money  except  that  which  consisted  of  metallic 
coins,  struck  or  regulated  by  the  authority  of  congress.  Dol 
lars  then  meant,  as  already  said,  certain  pieces  of  gold  or  silver, 
certified  to  be  of  a  prescribed  weight  and  purity  by  their  form 
and  impress  received  at  the  mint.  The  designation  of  dollars, 
in  previous  contracts,  meant  gold  or  silver  dollars  as  plainly  as 
if  those  metals  were  specifically  named. 

It  follows,  then,  logically,  from  the  doctrine  advanced  by 
the  majority  of  the  court  as  to  the  power  of  congress  over  the 
subject  of  legal  tender,  that  congress  may  borrow  gold  coin 
upon  a  pledge  of  the  public  faith  to  repay  gold  at  the  maturity 
of  its  obligations,  and  yet,  in  direct  disregard  of  its  pledge,  in 
open  violation  of  faith,  may  compel  the  lender  to  take,  in 
place  of  the  gold  stipulated,  its  own  promises ;  and  that  legis 
lation  of  this  character  would  not  be  in  violation  of  the  con 
stitution,  but  in  harmony  with  its  letter  and  spirit. 

The  government  is,  at  the  present  time,  seeking  in  the  mar 
kets  of  the  world  a  loan  of  several  hundred  millions  of  dollars 
in  gold,  upon  securities  containing  the  promises  of  the  United 
States  to  repay  the  money,  principal  and  interest,  in  gold;  yet 


424  MONOPOLIES   AND   THE   PEOPLE. 

this  court,  the  highest  tribunal  of  the  country,  this  day  de 
clares,  by  its  solemn  decision,  that  should  such  loan  be  ob 
tained,  it  is  entirely  competent  for  congress  to  pay  it  off,  not 
in  gold,  but  in  notes  of  the  United  States  themselves,  payable 
at  such  time  and  in  such  manner  as  congress  may  itself  de 
termine,  and  that  legislation  sanctioning  such  gross  breach 
of  faith  would  not  be  repugnant  to  the  fundamental  law  of 
the  land. 

What  is  this  but  declaring  that  repudiation  by  the  govern 
ment  of  the  United  States  of  its  solemn  obligations  would  be 
constitutional  ?  Whenever  the  fulfilment  of  the  obligation  in 
the  manner  stipulated  is  refused,  and  the  acceptance  of  some 
thing  different  from  that  stipulated  is  enforced  against  the  will 
of  the  creditor,  a  breach  of  faith  is  committed ;  and  to  the  ex 
tent  of  the  difference  of  value  between  the  thing  stipulated 
and  the  thing  which  the  creditor  is  compelled  to  receive,  there 
is  repudiation  of  the  original  obligation.  I  am  not  willing  to 
admit  that  the  constitution,  the  boast  and  glory  of  our  country, 
would  sanction  or  permit  any  such  legislation.  Repudiation 
in  any  form,  or  to  any  extent,  would  be  dishonor,  and  for  the 
commission  of  this  public  crime  no  warrant,  in  my  judgment, 
can  ever  be  found  in  that  instrument. 

Some  stress  has  been  placed  in  argument  in  support  of  the 
asserted  power  of  congress  over  the  subject  of  legal  tender  in 
the  fact  that  congress  can  regulate  the  alloy  of  the  coins  issued 
under  its  authority,  and  has  exercised  its  power  in  this  respect 
without  question,  by  diminishing  in  some  instances,  the  actual 
quantity  of  gold  or  silver  they  contain.  Congress,  it  is  as 
sumed,  can  thus  put  upon  the  coins  issued  other  than  their  in 
trinsic  value;  therefore,  it  is  argued,  congress  may,  by  its  de 
claration,  give  a  value  to  the  notes  of  the  United  States,  issued 
to  be  used  as  money,  other  than  that  which  they  actually 
possess. 

The  assumption  and  the  inference  are  both  erroneous,  and 
the  argument  thus  advanced  is  without  force,  and  is  only  sig 
nificant  of  the  weakness  of  the  position  which  has  to  rest  for 
its  support  on  an  assumed  authority  of  the  government  to  de 
base  the  coin  of  the  country. 


APPENDIX.  425 

Undoubtedly  congress  can  alter  the  value  of  the  coins  issued 
by  its  authority  by  increasing  or  diminishing,  from  time  to 
time,  the  alloy  they  contain,  just  as  it  may  alter,  at  its  pleas 
ure,  the  denominations  of  the  several  coins  issued,  but  there 
its  power  stops.  It  cannot  make  these  altered  coins  the  equiv 
alent  of  the  coins  in  their  previous  condition;  and,  if  the  new 
coins  should  retain  the  same  names  as  the  original,  they  would 
only  be  current  at  their  true  value.  Any  declaration  that  they 
should  have  any  other  value  would  be  inoperative  in  fact,  and 
a  monstrous  disregard  by  congress  of  its  constitutional  duty. 
The  power  to  coin  money,  as  already  declared  by  this  court,  is 
a  great  trust  devolved  upon  congress,  carrying  with  it  the  duty 
of  creating  and  maintaining  a  uniform  standard  of  value 
throughout  the  Union,  and  it  would  be  a  manifest  abuse  of 
this  trust  to  give  to  the  coins  issued  by  its  authority  any  other 
than  their  real  value.  By  debasing  the  coins,  when  once  the 
standard  is  fixed,  is  meant  giving  to  the  coin^,  by  their  form 
and  impress,  a  certificate  of  their  having  a  relation  to  that 
standard  different  from  that  which,  in  truth,  they  possess;  in 
other  words,  giving  to  the  coins  a  false  certificate  of  their  value. 
Arbitrary  and  profligate  governments  have  often  resorted  to 
this  miserable  scheme  of  robbery,  which  Mill  designates  as  a 
shallow  and  impudent  artifice,  the  "least  covert  of  all  modes 
of  knavery,  which  consists  in  calling  a  shilling  a  pound,  that 
a  debt  of  one  hundred  pounds  may  be  cancelled  by  the  pay 
ment  of  one  hundred  shillings." 

In  this  country  no  such  debasement  has  ever  been  attempted, 
and  I  feel  confident  that  none  will  ever  be  tolerated.  The 
changes  in  the  quantity  of  alloy  in  the  different  coins  has  been 
made  from  time  to  time,  not  with  any  idea  of  debasing  them, 
but  for  the  purpose  of  preserving  the  proper  relative  value  be 
tween  gold  and  silver.  The  first  coinage  act,  passed  in  1792, 
provided  that  the  coins  should  consist  of  gold,  silver,  and  cop 
per — the  coins  ot  cents  and  half-cents  consisting  of  copper, 
and  the  other  coins  consisting  of  gold  and  silver  —  and  that 
the  relative  value  of  gold  and  silver  should  be  as  fifteen  to  one, 
that  is,  that  an  ounce  of  gold  should  be  taken  as  the  equal  in 
value  of  fifteen  ounces  of  silver. 

In  progress  of  time,  owing  to  the  increased  production  of 
58 


426  MONOPOLIES    AND   THE   PEOPLE. 

silver,  particularly  from  the  mines  of  Mexico  and  South  Amer 
ica,  this  relative  value  was  changed.  Silver  declined  in  rela 
tive  value  to  gold  until  it  bore  the  relation  of  one  to  sixteen 
instead  of  one  to  fifteen.  The  result  was  that  the  gold  was 
bought  up  as  soon  as  coined,  being  worth  intrinsically  sixteen 
times  the  value  of  silver,  and  yet  passing  by  law  only  at  fif 
teen  times  such  value,  and  was  sent  out  of  the  country  to  be 
recoined.  The  attention  of  congress  was  called  to  this  change 
in  the  relative  value  of  the  two  metals  and  the  consequent  dis 
appearance  of  gold  coin.  This  led,  in  1834,  to  an  act  adjust 
ing  the  rate  of  gold  coin  to  its  true  relation  to  silver  coin. 

The  discovery  of  gold  in  California,  some  years  afterwards, 
and  the  great  production  of  that  metal,  again  changed  in  an 
other  direction  the  relative  value  of  the  two  metals.  Gold  de 
clined,  or  in  other  words,  silver  was  at  a  premium,  and  as  gold 
coin  before  1834  was  bought  up,  so  now  silver  coin  was  bought 
up,  and  a  scarcity  of  small  coin  for  change  was  felt  in  the  com 
munity.  Congress  again  interfered,  and  in  1853  reduced  the 
amount  of  silver  in  coins  representing  fractional  parts  of  a 
dollar,  but  even  then  these  coins  were  restricted  from  being  a 
legal  tender  for  sums  exceeding  five  dollars,  although  the  small 
silver  coins  of  previous  issue  continued  to  be  a  legal  tender 
for  any  amount.  Silver  pieces  of  the  denomination  of  three 
cents  had  been  previously  authorized  in  1851,  but  were  only 
made  a  tender  for  sums  of  thirty  cents  and  under.  These  coins 
did  not  express  their  actual  value,  and  their  issue  was  soon 
stopped,  and  in  1853  their  value  was  increased  to  the  standard 
of  coins  of  other  fractional  parts  of  a  dollar. 

The  whole  of  this  subject  has  been  fully  and  satisfactorily 
explained  in  the  very  able  and  learned  argument  of  the  coun 
sel  who  contended  for  the  maintenance  of  the  original  decision 
of  this  court  in  Hepburn  v.  Griswold.  He  showed  by  the  de 
bates  that  congress  has  been  moved,  in  all  its  actions  under 
the  coinage  power,  only  by  an  anxious  desire  to  ascertain  the 
true  relative  value  of  the  two  precious  metals,  and  to  fix  the 
coinage  in  accordance  with  it ;  and  that  in  no  case  has  any  de 
viation  from  intrinsic  value  been  permitted  except  in  coins  for 
fractional  parts  of  a  dollar,  and  even  that  has  been  only  of  so 
slight  a  character  as  to  prevent  them  from  being  converted 


APPENDIX.  427 

into  bullion,  the  actual  depreciation  being  made  up  by  their 
portability  and  convenience. 

It  follows,  from  this  statement  of  the  action  of  congress  in 
altering  at  different  times  the  alloy  of  certain  coins,  that  the 
assumption  of  power  to  stamp  metal  with  an  arbitrary  value 
and  give  it  currency,  does  not  rest  upon  any  solid  foundation, 
and  that  the  argument  built  thereon  goes  with  it  to  the  ground. 

I  have  thus  far  spoken  of  the  legal  tender  provision  with 
particular  reference  to  its  application  to  debts  contracted  pre 
vious  to  its  passage.  It  only  remains  to  say  a  few  words  as  to 
its  validity  when  applied  to  subsequent  transactions. 

So  far  as  subsequent  contracts  are  made  payable  in  notes  of 
the  United  States,  there  can  of  course  be  no  objection  to  their 
specific  enforcement  by  compelling  a  delivery  of  an  equal 
amount  of  the  notes,  or  by  a  judgment  in  damages  for  their 
value  as  estimated  in  gold  or  silver  dollars,  nor  would  there  be 
any  objection  to  such  enforcement  if  the  legal  tender  provision 
had  never  existed.  From  the  general  use  of  the  notes 
throughout  the  country  and  the  disappearance  of  gold  and 
silver  coin  from  circulation,  it  may  perhaps  be  inferred  in  most 
cases,  that  notes* of  the  United  States  are  intended  by  the 
parties  where  gold  or  silver  dollars  are  not  expressly  desig 
nated,  except  in  contracts  made  in  the  Pacific  states,  where 
the  constitutional  currency  has  ahvays  continued  in  uses.  As 
to  subsequent  contracts,  the  legal  tender  provision  is  not  as 
unjust  in  its  operation  as  when  applied  to  past  contracts,  and 
does  not  impair  to  the  same  extent  private  rights.  But  so  far 
as  it  makes  the  receipt  of  the  notes,  in  absence  of  any  agree 
ment  of  the  parties,  compulsory  in  payment  of  such  contracts, 
it  is,  in  my  judgment,  equally  unconstitutional.  This  seems 
to  me  to  follow  necessarily  from  the  duty  already  mentioned 
cast  upon  congress  by  the  coinage  power, — to  create  and  main 
tain  a  uniform  metallic  standard  of  value  throughout  the  Union. 
Without  a  standard  of  value  of  some  kind,  commerce  would 
be  difficult,  if  not  impossible,  and  just  in  proportion  to  the 
uniformity  and  stability  of  the  standard  is  the  security  and 
consequent  extent  of  commercial  transactions.  How  is  it  pos 
sible  for  congress  to  discharge  its  duty  by  making  the  accept 
ance  of  paper  promises  compulsory  in  all  future  dealings — 


428  MONOPOLIES   AND   THE    PEOPLE. 

promises  which  necessarily  depend  for  their  value  upon  the 
confidence  entertained  by  the  public  in  their  ultimate  pay 
ment,  and  the  consequent  ability  of  the  holder  to  convert  them 
into  gold  or  silver  —  promises  which  can  never  be  uniform 
throughout  the  Union,  but  must  have  different  values  in  dif 
ferent  portions  of  the  country ;  one  value  in  New  York,  an 
other  at  New  Orleans,  and  still  a  different  one  at  San  Fran 
cisco. 

Speaking  of  paper  money  issued  by  the  states, —  and  the 
same  language  is  equally  true  of  paper  money  issued  by  the 
United  States — Chief  Justice  Marshall  says,  in  Craig  v.  The 
State  of  Missouri :  u  Such  a  medium  has  been  always  liable  to 
considerable  fluctuation.  Its  value  is  continually  changing; 
and  these  changes,  often  great  and  sudden,  expose  individuals 
to  immense  loss,  are  the  sources  of  ruinous  speculations,  and 
destroy  all  confidence  between  man  and  man.  To  cut  up  this 
mischief  by  the  roots,  a  mischief  which  was  felt  by  the  United 
States,  and  which  deeply  affected  the  interest  and  prosperity 
of  all,  the  people  declared  in  their  constitution  that  no  state 
should  emit  bills  of  credit." 

Mr.  Justice  Washington,  after  referring,  in  Ogden  v.  Saun- 
dersy  to  the  provision  of  the  constitution  declaring  that  no  state 
shall  coin  money,  emit  bills  of  credit,  make  anything  but  gold 
and  silver  coin  a  tender  in  payment  of  debts,  says :  "  These  pro 
hibitions,  associated  with  the  powers  granted  to  congress  '  to 
coin  money  and  to  regulate  the  value  thereof,  and  of  foreign 
coin,'  most  obviously  constitute  members  of  the  same  family, 
being  upon  the  same  subject  and  governed  by  the  same  policy. 
This  policy  was  to  provide  a  fixed  and  uniform  standard  of 
value  throughout  the  United  States,  by  which  the  commercial 
and  other  dealings  between  the  citizens  thereof,  or  between 
them  and  foreigners,  as  well  as  the  moneyed  transactions  of 
the  government,  should  be  regulated.  For  it  might  well  be 
asked,  "Why  vest  in  congress  the  power  to  establish  a  uniform 
standard  of  value  by  the  means  pointed  out,  if  the  states  might 
use  the  same  means,  and  thus  defeat  the  uniformity  of  the 
standard,  and  consequently  the  standard  itself?  And  why 
establish  a  standard  at  all  for  the  government  of  the  various 
contracts  which  might  be  entered  into,  if  those  contracts  might 


APPENDIX.  429 

afterwards  be  discharged  by  a  different  standard,  or  by  that 
which  is  not  money,  under  the  authority  of  state  tender  laws  ? 
It  is  obvious,  therefore,  that  these  prohibitions  in  the  tenth 
section  are  entirely  homogeneous,  and  are  essential  to  the 
establishment  of  a  uniform  standard  of  value  in  the  formation 
and  discharge  of  contracts." 

It  is  plain  that  this  policy  cannot  be  carried  out,  and  this 
fixed  and  uniform  metallic  standard  of  value  throughout  the 
United  States  be  maintained,  so  long  as  any  other  standard  is 
adopted,  which  of  itself  has  no  intrinsic  value  and  is  forever 
fluctuating  and  uncertain. 

For  the  reasons  which  I  have  endeavored  to  unfold,  I  am 
compelled  to  dissent  from  the  judgment  of  the  majority  of  the 
court.  I  know  that  the  measure,  the  validity  of  which  I  have 
called  in  question,  was  passed  in  the  midst  of  a  gigantic  rebel 
lion,  when  even  the  bravest  hearts  sometimes  doubted  the 
safety  of  the  republic,  and  that  the  patriotic  men  who  adopted 
it  did  so  under  the  conviction  that  it  would  increase  the  ability 
of  the  government  to  obtain  funds  and  supplies,  and  thus  ad 
vance  the  national  cause.  Were  I  to  be  governed  by  my  ap 
preciation  of  the  character  of  those  men,  instead  of  my  views 
of  the  requirements  of  the  constitution,  I  should  readily  assent 
to  the  views  of  the  majority  of  the  court.  But,  sitting  as  a 
judicial  officer,  and  bound  to  compare  every  law  enacted  by 
congress  with  the  greater  law  enacted  by  the  people,  and  be 
ing  unable  to  reconcile  the  measure  in  question  with  that  fun 
damental  law,  I  cannot  hesitate  to  pronounce  it  as  being,  in 
my  judgment,  unconstitutional  and  void. 

In  the  discussions  which  have  attended  this  subject  of  legal 
tender  there  has  been  at  times  what  seemed  to  me  to  be  a  co 
vert  intimation,  that  opposition  to  the  measure  in  question 
was  the  expression  of  a  spirit  not  altogether  favorable  to  the 
cause,  in  the  interest  of  which  that  measure  was  adopted.  All 
such  intimations  I  repel  with  all  the  energy  I  can  express.  I 
do  not  yield  to  any  one  in  honoring  and  reverencing  the  noble 
and  patriotic  men  who  were  in  the  councils  of  the  nation  dur 
ing  the  terrible  struggle  with  the  rebellion.  To  them  belong 
the  greatest  of  all  glories  in  our  history, — that  of  having  saved 
the  Union,  and  that  of  having  emancipated  a  race.  For  these 


430  MONOPOLIES   AND   THE    PEOPLE. 

results  they  will  be  remembered  and  honored  so  long  as  the 
English  language  is  spoken  or  read  among  men.  But  I  do 
not  admit  that  a  blind  approval  of  every  measure  which  they 
may  have  thought  essential  to  put  down  the  rebellion  is  any 
evidence  of  Joyalty  to  the  country.  The  only  loyalty  which  I 
can  admit  consists  in  obedience  to  the  constitution  and  laws 
made  in  pursuance  of  it.  It  is  only  by  obedience  that  affec 
tion  and  reverence  can  be  shown  to  a  superior  having  a  right 
to  command.  So  thought  our  great  Master  when  he  said  to 
his  disciples  :  "  If  ye  love  me,  keep  my  commandments." 


CHAPTER  V. 


GOVERNMENT    CONTROL    OF    RAILROADS. 

concluding  what  we  desired  to  say  on  the  subject  of 
controlling  and  regulating  railroads  and  railroad  corpora- 
tions,  our  attention  has  been  directed  to  a  circular  from 
The  New  York  Nation,  of  July  27th,  1873,  entitled:  "The 
Railroad  Discussion,  and  Common  Sense."  This  singular  ar 
ticle  challenges  attention.  If  it  is  put  forth  in  the  interest  of 
railroad  corporations,  we  can  readily  account  for  the  views  ex 
pressed,  and  the  covert  foreshadowing  of  national  control  of 
railroads ;  but  if  it  be  published  and  circulated  in  the  interest 
of  the  people  as  The  Nation  would  have  us  understand,  it  is 
not  calculated  to  assist  them  in  their  efforts  at  reform,  but  on 
the  contrary  will  tend  to  divide  and  distract  their  counsels,  and 
delay  the  relief  sought. 

We  copy  the  circular,  that  the  reader  may  judge  of  its  mer 
its,  and  to  give  a  more  intelligent  understanding  of  our  remarks 
upon  it :  — 

THE  RAILROAD  DISCUSSION  AND    COMMON    SENSE  —  THE   LATEST   DE 
VICE    FOR    FIXING    RATES    OF   TRANPORTATION. 

(From  the  Nation  [N.  Y.]  of  July  17.) 

We  have  followed,  and  shall  continue  to  follow,  the  "  farm 
ers'  movement "  with  great  interest,  but  it  must  be  confessed 
that  it  seems  at  times  of  no  little  difficulty,  owing  to  the  very 
heterogeneous  composition  of  the  organizations  which  are  car 
rying  it  on,  and  the  wide  diversity  of  their  character  and 
avowed  aims.  When  Judge  Lawrence  was  turned  out  of  office 
in  Illinois  by  the . "  Grangers,"  and  Judge  Craig  put  in  his 
place,  we  took  it  for  granted  that  they  were  going  to  deliver 
themselves  from  the  tyranny  of  the  railroads  by  putting  judges 
on  the  bench  pledged  to  interpret  the  state  constitution  in  a 


432  MONOPOLIES   AND   THE   PEOPLE. 

particular  way,  or  in  other  words,  as  one  of  the  local  papers 
put  it,  by  showing  that  "  the  people "  were  superior  to  both 
laws  and  judges.  It  has,  however,  since  been  stoutly  denied 
that  this  interference  with  the  bench  was  anything  more  than 
a  local  accident,  and  we  have  been  assured  that  the  farmers 
seek  changes  of  a  much  more  legitimate  character,  and  resting 
on  more  solid  foundations  than  the  creation  of  a  subservient 
judiciary.  The  recent  platforms  have  certainly  had  a  much 
wider  sweep  than  the  earlier  ones,  and,  unless  language  has 
been  strangely  abused  in  making  them,  embrace  grave  modifi 
cations  in  fiscal  as  well  as  in  railroad  legislation.  But  the 
question  how  to  reduce  the  railroads  to  the  condition  of  pub 
lic  highways,  controllable  by  and  existing  solely  or  mainly  for 
the  convenience  of  the  community,  is  still  apparently  as  far 
from  solution  as  ever.  It  is  by  no  means  surprising  that  this 
should  be  the  case,  but  that  it  is  the  case  we  are  forced  to  con 
clude  by  the  extraordinary  character  of  the  latest  plan  pro 
pounded  by  the  reformers,  which  has  had  sufficient  plausibility 
to  command  the  approval  of  so  sober-minded  a  paper  as  the 
Chicago  Tribune. 

The  farmers  have  been  accused,  partly  in  consequence  of 
their  escapade  about  the  judges  in  Illinois,  of  seeking  to  rob 
the  railroad  companies  of  their  lawful  earnings  by  forcing  them 
to  carry  on  their  business  at  a  loss,  under  the  operation  of  cast- 
iron  rules,  drawn  up  without  reference  to  its  peculiar  nature. 
This  was  a  charge  of  which  the  farmers  soon  began  to  see  the 
gravity,  and  they  accordingly  now  announce  that  they  have  no 
scheme  of  spoliation  or  confiscation  in  their  minds,  but  that 
they  have  at  last  hit  upon  a  mode  of  ascertaining  what  are 
"reasonable  rates,"  which  consists  in  discovering  what  was  the 
amount  of  capital  "  actually  invested  in  constructing  and  ope 
rating  the  roads,"  and  treating  a  fair  percentage  of  this  as  a 
proper  return  to  the  stockholders,  and  all  charges  which  bring 
in  more  than  this  as  "unreasonable,"  and  therefore  open  to 
prohibition  by  the  courts  and  state  legislatures.  Under  this 
theory  of  railroad  property,  all  stock  which  does  not  represent 
money  actually  invested  is  treated  as  "fictitious,"  and  all  at 
tempts  to  earn  dividends  on  such  stock  as  attempts  at  extor 
tion.  For  instance— to  put  a  case  of  frequent  occurrence  —  a 


APPENDIX.  433 

corporation  obtains  a  charter  for  a  road  which  will  cost  two 
million  dollars  to  build.  It  accordingly  borrows  the  two  mil 
lions  on  mortgage  bonds,  and  constructs  the  road,  while  the 
members  divide  among  themselves  two  millions  of  stock  more, 
and  they  work  the  road  so  as  to  make  it  pay  interest  on  the 
four  millions.  The  farmers  now  say  that  no  road  shall  be  so 
worked  as  to  pay  interest  on  anything  but  the  proceeds  of  the 
bonds,  or,  in  other  words,  the  actual  cost  of  construction  and 
equipment.  This,  stripped  of  details,  is  the  new  plan,  as 
gravely  propounded  by  the  Chicago  Tribune. 

Now,  if  anybody  will  get  up  and  propose  a  general  railroad 
act  of  this  nature,  applicable  to  all  roads  hereafter  to  be  built, 
we  think  we  can  promise  that  he  will  have  the  hearty  support 
of  everybody  who  has  seriously  reflected  on  the  railroad  prob 
lem.  Forbid  the  construction  of  any  road  except  with  the 
proceeds  of  paid-up  stock,  and  forbid  any  higher  dividends 
than  a  certain  fixed  percentage  on  this  amount,  and  we  shall 
have  a  rule  of  which  nobody  can  complain.  We  do  not  be 
lieve  that  a  single  mile  of  railroad  would  ever  be  constructed 
under  such  a  rule  in  a  new  and  thinly  settled  country  like  the 
west  or  south.  Safe  investments  are  not  so  scarce  as  to  induce 
people  to  go  into  one  of  the  most  unsafe  of  investments,  and 
one  promising  in  most  cases  no  return  at  all  for  several  years, 
for  the  mere  chance  of  seven  or  even  ten  per  cent  at  the  out 
side.  But  we  should,  nevertheless,  be  heartily  glad  to  see  the 
plan  tried,  and  believe  it  would,  by  stopping  railroad  construc 
tion  for  the  present,  bring  the  western  farmers  to  a  healthier 
comprehension  of  their  relations  to  the  roads,  and  railroad 
companies  to  a  healthier  comprehension  of  their  relations  to 
the  community,  and  might  tend  to  a  solution  of  the  railroad 
problem,  which  would  be  both  permanent  and  satisfactory. 

But  the  application  of  any  such  rule  now  to  roads  already  in 
operation  would  be  spoliation  pure  and  simple  —  spoliation  as 
flagrant  as  any  ever  proposed  by  Karl  Marx  or  Ben.  BiTtler; 
if  any  attempt  were  made  to  carry  it  out,  it  would  produce 
perhaps  the  greatest  financial  crash  ever  witnessed.  It  has  in 
the  first  place  that  leading  characteristic  of  Ben.  Butler's 
greenback  scheme,  that  it  would  not  only  violate  a  tacit  pledge 
made  by  the  state  to  individuals,  but  it  would  deprive  men  of 
54 


434  MONOPOLIES   AND   THE   PEOPLE. 

rewards  already  earned  by  running  great  risks.  When  a  rail 
road  constructed  for  two  million  dollars  is  made  to  earn  inter 
est  on  four  millions,  the  case  is  precisely  similar  to  that  of  a 
government  which  in  a  time  of  great  danger  and  perplexity 
sells  seven  per  cent  bonds  at  fifty;  and  the  present  proposal  of 
the  farmers  resembles  Butler's  plan  of  paying  the  bondholders 
in  1870  what  they  gave  for  their  bonds  in  1862.  In  fact,  it  is 
the  old-fashioned  game  on  a  great  scale  of  "  Heads  I  win,  tails 
you  lose."  The  west  has,  during  the  past  thirty  years,  wanted 
railroads,  which  there  was  a  very  small  chance  of  making  pro 
fitable  for  a  long  time.  It  encouraged  eastern  men  and  for 
eigners  to  make  them  in  any  way  they  pleased,  running  what 
ever  risk  there  was,  and  pocketing  whatever  gain  there  might 
be,  and  they  were  made.  The  investment  then  was  one  of 
great  danger  and  diificulty ;  to  treat  it  now  as  one  of  no  danger 
and  no  difficulty  would  be  simply  swindling.  The  word  is  hard, 
but  the  times  demand  plain  speech.  This  was  perhaps  a  bad 
mode  of  securing  lines  of  communication,  but  the  laws  allowed 
it  and  encouraged  it,  and  the  people  applauded  it,  and  it  is  now 
a  contract  as  binding  in  morals  as  in  law.  It  is  open  to  us  to 
turn  over  a  new  leaf,  and  permit  no  more  roads  to  be  made  in 
that  way,  but  it  is  not  open  to  us  to  treat  those  who  lent  us 
their  money  as  dupes.  As  there  has  been  enough  of  this  sharp 
practice  already,  more  of  it  would  seriously  shake  the  founda 
tions  of  social  order. 

In  the  second  place,  as  regards  the  older  roads,  it  is  not  pos 
sible  for  "  the  people  "  or  anybody  else  to  ascertain  what  is 
the  exact  amount  on  which,  in  abstract  justice,  the  earnings 
ought  to  pay  interest.  The  stock,  whether  "  fictitious "  or 
not,  has  in  most  cases  passed  out  of  the  hands  of  the  original 
holders.  It  has  been  sold  and  resold,  in  open  market,  under 
the  most  solemn  guarantees  known  to  civilized  society,  with 
the  understanding  that  it  represented  the  bona  fide  ownership 
of  the  roads,  with  all  their  earnings,  possible  as  well  as  actual. 
The  laws,  the  courts,  and  public  opinion,  assured  to  it  this 
character  without  reservation  or  qualification.  In  this  charac 
ter  it  has  passed  into  the  hands  of  widows,  orphans,  and  help 
less  people  generally,  of  charitable  corporations,  of  colleges, 
banks,  and  institutions  of  all  kinds  by  which  the  affairs  of  the 


APPENDIX.  435 

community  are  administered.  To  throw  any  doubt  on  its 
value  now  would  be  to  cause  an  amount  of  misery  and  alarm 
which  no  thinking  man  could  contemplate  without  a  shudder. 
If  the  state  wants  to  make  the  railroads  common  highways,  it 
has  the  right  to  take  them,  but  at  their  market  value,  paying 
the  owners  what  other  people  would  pay  them,  and  not  en 
quiring  curiously  and  knavishly  into  the  original  cost.  Be 
tween  honest  parties  to  a  bargain,  that,  to  use  a  homely  phrase, 
is  "  Neither  here  or  there."  The  people  ought,  undoubtedly, 
to  have  looked  forward  a  little  when  they  first  began  to  grant 
charters ;  but  not  having  done  so,  they  ought  not  to  now  throw 
on  others  the  whole  damage  done  by  their  own  laches. 

Though  last,  not  least,  much  of  the  outcry  over  the  high 
rates  charged  by  railroads  is  due  to  an  immense  but  deeply 
seated  popular  delusion  as  to  the  value  of  railroad  property. 
"When  one  puts  his  newspaper  aside,  and  sits  down  calmly  to 
examine  the  receipts  which  the  farmers  are  so  anxious  to  have 
cut  down,  the  proposal  we  are  discussing  assumes  a  somewhat 
ludicrous  aspect.  We  have  before  us  the  last  issue  of  u  Poor's 
Railroad  Manual/'  which  certainly  ought  to  be  perfectly  stud 
ied  before  the  minds  of  the  public  are  filled  with  wild  and  rev 
olutionary  notions  about  railroad  property.  There  were  in 
operation  last  year  in  the  United  States,  57,323  miles  of  rail 
road,  the  net  earnings  of  which  bore  to  the  cost  of  the  roads 
the  relation  of  5.20  per  cent,  and  to  the  capital  stock  of  3.21. 
This  means  simply  that  the  work  of  transportation  in  the  Uni 
ted  States  is,  on  the  average,  already  done  at  a  loss  to  the 
owners  of  the  lines,  or,  in  other  words,  vastly  more  cheaply  to 
the  public  than  there  is  the  least  likelihood  of  its  being  done 
in  any  other  way  —  an  assertion  which  anybody  may  verify  by 
examining  the  accounts  of  the  New  York  state  canals.  Now, 
fancy  anybody  seriously  proposing  to  capitalists  to  construct 
railroads,  as  most  of  the  western  railroads  were  constructed, 
through  a  howling  wilderness,  for  the  chance  of  five  and  a  half 
per  cent,  whenever  the  earnings  allowed  it ;  and  fancy  what 
subjects  for  spoliation  are  presented  by  the  bloated  owners  of 
railroad  property  who  pocket  on  the  average  less  than  four  per 
cent  on  the  face  value  of  their  stock.  Let  us  add,  finally,  that 
no  corporation  should  be  restricted  by  law  to  a  certain  rate  of 


436  MONOPOLIES   AND    THE    PEOPLE. 

earnings,  unless  it  contracts  freely  to  do  the  work  on  those 
terms  or  has  a  minimum  guaranteed  to  it  by  the  state.  In 
short,  the  railroad  question,  we  would  remind  the  Chicago 
Tribune,  is  not  simply  a  question  of  dollars  and  cents.  It  is  a 
question  of  morality  in  its  highest  and  most  important  phases, 
and  one  the  settlement  of  which  must  touch  the  security  of  all 
property,  and  affect  the  value  of  constitutions  as  safeguards  of 
individual  rights. 

We  have  gone  on  for  thirty  years  treating  railroads  as  pri 
vate  property,  and  permitting  and  encouraging  their  construc 
tion  by  private  enterprise.  Out  of  this  numerous  abuses  have 
grown  up  which  ought  to  be  remedied.  The  corporations 
have  grown  too  powerful ;  their  influence  in  politics  is  cor 
rupting  ;  the  power  of  directors  in  the  management  is  too 
great.  For  the  reform  of  all  this,  careful  legislation  preceded 
bg  careful  inquiry  is  necessary.  The  prohibition  of  special  leg 
islation  would  do  much  to  abate  the  corruption.  Some  means 
ought  also  to  be  devised  for  protecting  the  minority  of  the  stock 
holders  against  the  despotic  power,  which  in  some  cases 
amounts  to  virtual  confiscation,  of  those  holding  a  bare  ma 
jority  of  the  stock,  or,  in  other  words,  of  giving  stockholders 
the  means  of  actually  superintending  the  management  of  their 
own  property  and  defending  themselves  against  "  rings  "  und 
"  raids."  Moreover,  the  power  of  directors  to  do  anything 
but  work  the  road  ought  to  be  diminished.  Their  discretion 
as  regards  extensions,  combinations,  consolidations,  leases,  and 
purchases,  ought  to  be  greatly  reduced,  if  not  destroyed.  This 
involves  two  things  not  easily  supplied.  One  is  wise  legisla 
tion,  and  the  other  honest  government  inspection.  How  far 
we  are  from  both  is  best  shown  by  the  Illinois  attempt  at  re 
form,  which  consists  at  present  in  taking  the  working  of  the 
roads  out  of  the  hands  of  the  exceedingly  able  body  of  trained 
business  men  who  now  have  charge  of  it,  and  compelling  them 
to  use  a  crazy  table  of  "  rates  "  drawn  up  by  a  mob  of  excited 
and  ignorant  politicians.  If  we  are  not  prepared  for  this,  the 
alternative,  and  the  only  one,  is  the  purchase  of  the  railroads 
by  the  state,  and  their  management  by  our  Murphys  and  Ca- 
seys.  We  shall  not  argue  against  this  at  present,  for  obvious 
reasons.  But  this,  whatever  difficulties  it  may  present,  is  the 


APPENDIX.  437 

only  honorable  way  of  escaping  the  necessity  of  such  reforms 
in  the  present  system  as  we  have  indicated  above.  Whatever 
the  evils  of  our  railroad  system,  they  are  not  to  be  met  or  re 
moved  by  fraud. 

.First.  The  Nation  says  that  it  has  "  followed  the  <  farmers' 
movement '  with  great  interest,  and  with  no  little  difficulty, 
owing  to  the  heterogeneous  composition  of  the  organizations 
which  are  carrying  it  on,  and  the  wide  diversity  of  their  char 
acter  and  avowed  aims."  The  thought  suggested  is,  that  be 
cause  the  farmers  are  not  united  in  their  views  relative  to  the 
best  means  to  effect  reform,  because  of  the  heterogeniety  of 
their  composition,  the  author  of  the  circular  could  not  under 
stand  their  objects  and  aims.  Unity  of  thought  and  action  is 
rarely  found  in  any  body  of  men,  even  when  few  in  number, 
during  the  discussion  of  ends  sought  to  be  obtained.  Such 
unity  cannot  be  expected  in  the  first  stages  of  the  organization, 
and  discussions  of  plans  for  future  action.  When  the  people 
living  in  various  parts  of  the  country,  in  different  states,  w^ith 
diverse  interests,  but  all  having  in  view  the  accomplishment 
of  a  common  end,  attempt  to  unite  their  efforts,  it  would  be 
too  much  to  expect  that  they  would  harmonize  at  the  outset 
in  their  views,  or  that  they  would  not  commit  some  errors. 
The  "  farmers'  movement "  is  in  its  incipiency ;  it  may  be  said 
to  be  now  only  preparing  for  action,  and  it  is  yet  too  soon  to 
look  for  united  effort.  The  first  assertion  of  the  circular  is 
only  a  covert  thrust  at  the  "  farmers'  movement " — an  attempt 
to  impress  upon  the  public  mind  the  belief  that  it  is  the  effort 
of  an  irresponsible  mob  or  rabble  to  defy  law  and  override  the 
rights  of  other  classes,  and  especially  of  railroad  corporations. 
Hence  The  Nation  is  desirous  of  talking  "  common  sense," 
and  in  its  opening  discloses  its  "  common  sense  "  to  be  a  plea 
in  behalf  of  railroad  corporations. 

Second.  The  circular  casts  odium  on  the  efforts  now  being 
made  to  correct  the  abuses  practiced  by  railroad  corporations, 
by  the  use  of  the  following  language ;  "  When  Judge  Law 
rence  was  turned  out  of  office  in  Illinois  by  the  Grangers,  and 
Judge  Craig  was  put  in  his  place,  we  took  it  for  granted  that 


438  MONOPOLIES   AND   THE   PEOPLE. 

they  were  going  to  deliver  themselves  from  the  tyranny  of 
railroads  by  putting  judges  on  the  bench  pledged  to  interpret 
the  state  constitution  in  a  particular  way,  or,  in  other  words, 
as  a  local  paper  has  it,  by  showing  that  '  the  people  were  su 
perior  to  both  laws  and  judges.' '  Is  it  true  that  "  Judge  Law 
rence  was  turned  out  of  office  ?  "  He  was  a  candidate  for  re 
election,  but  a  majority  of  the  people  voted  for  another  man. 
Judge  Craig  was  elected  to  office  in  the  constitutional  method, 
and  took  the  seat  formerly  occupied  by  Judge  Lawrence. 
The  people  did  not  "  turn  him  out,"  but  in  the  legal  method, 
when  his  term  had  expired,  elected  another  man.  But,  says 
the  circular,  "  we  took  it  for  granted  that  they  (the  Grangers) 
were  going  to  deliver  themselves,"  etc.  There  were  no  other 
judges  to  be  elected,  and  there  was  nothing  in  the  election  of 
Craig  that  would  warrant  The  Nation  in  arriving  at  the  conclu 
sion  that  control  of  the  state  was  to  be  taken,  and  judges 
elected  pledged  to  decide  constitutional  questions  in  a  particu 
lar  way.  The  idea  is  put  prominently  forth  that  the  people 
who  are  attempting  reform  are  a  heterogeneous,  irresponsible, 
body  of  men — a  mob,  who,  by  the  mere  strength  of  numbers, 
are  going  to  overturn  all  law,  pack  the  courts,  and  rule  as 
mere  caprice  should  dictate.  This  was  taken  for  granted,  be 
cause  the  people  had  elected  one  judge  whom  they  believed 
was  in  sympathy  with  them.  By  the  same  rule  we  are  war 
ranted  in  assuming  that  the  appointment  of  two  judges  in 
sympathy  with  the  railroad  interest  of  the  county  will  revolu 
tionize  this  whole  government,  and  that  all  judges  to  be  here 
after  appointed  will  be  pledged  to  decide  all  constitutional 
questions  in  favor  of  railroads.  The  author  of  this  circular, 
however,  is  forced  to  admit  that  he  was  mistaken  in  his  con 
clusions,  and  that  the  farmers  u  seek  changes  of  a  more  legiti 
mate  character,  and  resting  on  a  more  solid  formation  than  the 
creation  of  a  subservient  judiciary."  While  the  people  of  the 
whole  country  knew  and  fully  understood  that  the  objects  the 
farmers  were  seeking  to  accomplish  were  relief  from  the  op 
pressions  and  extortions  practiced  by  railroad  companies; 
while  the  agricultural,  political,  and  religious  press  of  the  land 
had  been  discussing  the  various  propositions,  and  conventions 
of  farmers  and  mechanics  were  meeting,  and  platforms  and 


APPENDIX.  439 

principles  were  being  published,  and  the  Patrons  of  Husbandry 
were  discussing  at  public  meetings  and  in  the  newspapers  the 
best  means  for  adoption,  the  author  of  this  circular,  who  is 
now  coming  to  the  front  as  the  champion  of  railroad  corpora 
tions,  or  of  the  people,  or  of  both,  and  is  scattering  his  circu 
lar  throughout  the  land,  had  heard  nothing  of  the  movement, 
and  took  it  for  granted  that  all  that  was  sought  by  the 
"  Grangers"  was  to  elect  "judges  pledged  to  decide  constitu 
tional  questions  in  a  particular  way ;"  and  it  required  the  "  re 
cent  platforms  "  to  admonish  him  that  the  Grangers  looked  to 
a  reform  of  the  abuses  connected  with  the  railroads  and 
finances  of  the  country. 

With  the  new  light  our  author  received  from  the  "plat 
forms,"  he  hastens  to  illuminate  the  public  mind  on  this 
"  vexed  "  railroad  question.  Having  now  mastered  the  situa 
tion,  the  writer  takes  it  for  granted  that  the  all-important 
question  is,  "  How  to  reduce  railroads  to  the  condition  of  pub 
lic  highways,  controllable  and  existing  solely  or  mainly  for  the 
convenience  of  the  community,"  and  concludes  that  the  ques 
tion  is  "  as  far  from  solution  as  ever." 

It  matters  little  whether  railroads  are  considered  "  public 
highways  "  or  private  property.  The  name  by  which  they  are 
known  will  not  make  any  difference.  The  real  question  is, 
how  to  make  them  subserve  the  objects  for  which  they  were 
intended,  and  at  the  same  time  afford  a  fair  remuneration  to 
the  persons  owning  them.  Some  of  the  courts  have  already 
decided  that  the  railroads  of  the  country  are  public  highways ; 
but  such  decisions  afford  no  relief.  The  Nation  does  not  give 
us  its  opinion,  nor  does  it  seem  to  be  aware  that  the  supreme 
court  of  the  United  States  has  decided  that  railroads  are  pub 
lic  highways. 

Third.  The  Nation  says  that  "  The  farmers  have  been  ac 
cused  partly  because  of  their  escapade  about  the  judges  of  Illi 
nois,  of  seeking  to  rob  the  railroad  companies  of  their  lawful 
earnings,  by  forcing  them  to  carry  on  their  business  at  a  loss,  un 
der  the  operation  of  cast-iron  rules,  drawn  up  without  reference 
to  its  peculiar  nature  ;  that  the  farmers  virtually  acknowledged 
this  charge  when  they  saw  its  gravity,  and  that  they  accord- 


440  MONOPOLIES    AND    THE    PEOPLE. 

ingly  now  announce  that  they  have  no  scheme  of  spoliation  or 
confiscation  in  their  minds,  but  have  at  last  hit  upon  a  mode 
of  ascertaining  what  are  l  reasonable  rates/  which  consists  in 
discovering  what  was  the  amount  of  capital  invested  in  con 
structing  and  operating  the  roads,  and  treating  a  fair  per  cent 
on  this  as  a  proper  return  to  the  stockholders,  and  all  charges 
which  bring  in  more  than  this  as  '  unreasonable,'  and  there 
fore  open  to  prohibition  by  the  courts  and  state  legislatures." 
The  Nation  admits  that  this  rule  applied  to  companies  hereafter 
organized,  and  roads  hereafter  built,  would  be  just,  and  assures 
us  that  everybody  would  approve  of  such  a  law.  Let  the  road 
be  built  with  the  proceeds  of  paid-up  stock,  and  restricted  to 
a  fair  per  cent  dividend  on  such  paid  stock,  and  The  Nation 
will  approve.  To  verify  its  hearty  indorsement  of  this  plan,  it 
tells  us  in  the  next  sentence  that  it  does  "  not  believe  that  a 
single  mile  of  railroad  would  ever  be  constructed  under  such  a 
rule  in  a  new  and  thinly-settled  country  like  the  west  and 
south."  It  would  be  glad  to  see  it  tried,  believing  "  it  would 
stop  building  railroads  for  the  present,  bring  western  farmers 
to  a  healthier  comprehension  of  their  relation  to  the  roads, 
and  railroad  companies  to  a  healthier  comprehension  of  their 
relation  to  the  community,  and  might  tend  to  a  solution  of  the 
railroad  problem  which  would  be  both  permanent  and  satisfac 
tory."  It  gives  as  a  reason  why  no  roads  would  be  built,  that 
capitalists  would  not  invest  their  money  on  unsafe  security,  or 
where  the  return  would  be  uncertain.  The  logical  deduction 
is,  that  if  railroad  companies  are  limited  in  the  amount  of  their 
stock  to  the  actual  cost  of  the  roads,  no  money  can  be  obtained 
to  build  them ;  but  if  the  company  is  allowed  to  add  fictitious 
stock  —  to  "  water  "  it  at  pleasure,  then  capital  can  be  had. 

We  do  not  discover  the  force  of  this  reasoning.  Railroads 
are  usually  constructed  with  borrowed  capital.  The  capitalist 
loaning  his  money  loans  it  on  what  he  believes  to  be  advan 
tageous  terms  and  good  security.  If  a  road  cost  $2,000,000, 
and  is  built  with  borrowed  capital,  we  cannot  readily  see  how 
the  security  is  improved  by  issuing  to  the  stockholders  certifi 
cates  for  $2,000,000  of  stock,  no  part  of  which  has  been  paid. 
True,  it  may  have  the  effect  to  place  the  road  in  the  hands  of 
men  who  are  experienced  in  operating  roads,  capitalizing  their 


APPENDIX.  441 

earnings  and  watering  stocks,  borrowing  money  on  bonds,  and 
loading  the  road  with  a  burden  that  can  only  be  supported  by 
extortion ;  but  it  does  not  increase  the  value  of  the  security 
held  by  the  lender,  nor  does  it  enhance,  the  value  of  the  road. 
The  less  burden  in   the  way  of  debts  there  is  resting  on  a 
road,  the  more  valuable  are  its  stock  and  bonds.     We  confess 
we  cannot  discover  the  strength  of  The  Nation's  argument.    It 
seems  to  take  it  for  granted  that  railroads  can  only  b^  con 
structed  by  the  class  of  men  who  now  monopolize  the  busi 
ness;  in  other  words,  that  the  class  of  unscrupulous  men  who 
have  reduced  the  organizing  of  railroad  companies  and  the 
manner  of  obtaining  capital  for  the  construction  of  roads  to  a 
system,  are  the  only  men  who  can  undertake  any  railroad  en 
terprise.     It  looks  upon  the  south  and  west  as  destitute  of  men 
competent  to  organize  a  railroad  company,  or    to    procure 
means  for  the  construction  of  railroads,  or  to  construct  them 
when  the  capital  has   been  obtained.     It  regards   the  home 
construction  of  railroads  in  these  sections  as  out  of  the  ques 
tion.     It  concludes  that  the  method  now  adopted  for  procuring 
capital  and  constructing  railroads  is  the  only  one  that  can  be 
adopted.  •  It  forgets  that  in  purer  and  simpler  times  railroads 
were  built  and  owned  by  the  parties  living  along  their  lines ; 
that  the  process  of  adding  large  amounts  of  stock  by  watering 
was  not  then  discovered,  and  that  without  these  fictitious  ad 
ditions  fair  returns  were  made  for    the    amounts    invested. 
After  all,  railroads  are  only  built  when  and  where  the  business 
of  the  country  requires  them,  save  where  large  bounties  are 
paid.     In  the  west  and  south,  where  the  business  of  certain 
localities  and  districts  require  a  railroad,  it  will  be  built,  even 
if  the  legislature  should  require  the  owners  and  stockholders 
to  become  so  far  honest  as  to  limit  their  stock  to  the  actual 
cost  of  the  road,  and  to  compel  stockholders  to  pay  up  before 
obtaining  certificates  for  their  stock.   It  does  riot  require  these 
professional  men  to  organize  and  control  railroad  companies, 
or  the  roads  after  construction. 

But  for  the  interference  of  rings  formed  to  prevent  such  a  con 
summation,  any  company  of  men  who  desire  a  railroad  in  their 
locality,  by  pursuing  an  honest  course,  could  organize  a  company 
and  build  their  road.    If  the  amount  of  stock  necessary  to  build 
55 


442  MONOPOLIES   AND   THE    PEOPLE. 

the  road  was  in  good  faith  subscribed,  and  the  same  was  being 
paid  up  as  the  construction  of  the  road  progressed,  any  reason 
able  amount  of  money  could  be  obtained  by  such  company  by 
making  an  honest  showing  to  capitalists.  The  demand  for 
railroads  would  be  as  regularly  supplied,  as  for  any  other  arti 
cle  of  necessity.  The  laws  of  trade  would  regulate  their  con 
struction.  In  all  such  cases  capitalists  would  have  the  best  of 
security,  and  the  roads  would  pay  fair  dividends  on  paid-up 
capital  and  interest  on' the  sum  borrowed  for  legitimate  pur 
poses.  But  if  there  were  no  legitimate  call  for  the  road,  if  it 
were  intended  as  a  fraud,  by  a  set  of  educated  sharpers  who 
desired  to  receive  large  dividends  on  stock  not  paid  up,  or  to 
borrow  money  by  the  sale  of  bonds  in  an  amount  double  the 
cost  or  value  of  the  road  when  completed,  then  it  could  not  be 
built  under  the  new  rules  and  The  Nation's  prediction  would  be 
verified.  Any  legitimate  business  not  "cornered"  or  con 
trolled  by  combinations  or  rings  can  be  successfully  prosecuted, 
and  to  say,  as  does  The  Nation  in  substance,  that  if  railroad 
companies  are  forbidden  to  act  dishonestly  and  corruptly,  no 
more  railroads  will  be  constructed,  is  an  admission  that  the 
whole  system  is  a  fraud,  and  is  a  strong  argument  in  favor  of 
immediate,  prompt,  and  efficient  action  on  the  part  of  state 
legislatures  and  of  the  courts.  If  men  must  become  dishonest 
in  order  to  build  and  operate  railroads  successfully,  the  whole 
system  is  rotten  and  should  be  destroyed,  and  an  honest  plan 
substituted. 

Fourth.  But  says  The  Nation :  "  The  application  of  any  such 
rule  to  roads  already  in  operation,  would  be  spoliation,  pure  and 
simple.  *  *  *  *  It  would  not  only  violate  a  tacit  pledge 
made  by  the  state  to  individuals,  but  would  deprive  men  of 
rewards  already  earned  by  running  great  risks."  This  is  the 
old  argument  in  favor  of  railroad  companies,  but  with  this 
difference :  It  makes  the  state  a  party  to  the  dishonest  prac 
tices  of  men  who  have  enriched  themselves  at  the  expense  of 
the  public,  and  those  to  whom  they  have  sold  their  bonds.  We 
venture  the  assertion  that,  with  few  exceptions,  all  railroads  in 
the  United  States  that  have  been  honestly  and  prudently  man 
aged  have  earned  a  fair  per  cent  on  the  capital  actually  ex- 


APPENDIX.  443 

pended  in  building,  equipping,  and  operating  them,  and  that  a 
scale  of  tariffs  greatly  less  than  the  rates  now  charged  would, 
as  a  rule,  afford  fair  dividends  on  the  actual  cost  of  the  roads. 
No  instances  can  be  shown,  where  the  states,  in  granting  char 
ters  to  railroad  companies,  directly  or  in  the  passage  of  gen: 
eral  incorporation  statutes,  have  given  to  the  companies  the 
right  to  commit  frauds  upon  the  parties  with  whom  they  deal 
by  using  their  credit  to  build  their  roads,  and  without  payment 
of  their  subscriptions  issue  to  themselves  certificates  as  for 
paid-up  stock.  In  all  cases,  individual  stockholders  are  made 
liable  for  the  debts  to  the  amount  of  their  stock.  In  contem 
plation  of  law  the  stock  is  paid  up,  and  the  roads  are  con 
structed  by  using  the  capital  derived  from  this  source.  The 
stock  is  supposed  to  amount  to  as  much  as  the  cost  of  the  road. 
The  state,  in  giving  the  company  a  corporate  or  artificial  be 
ing,  enters  into  no  agreement,  express  or  implied,  to  make 
good  the  contract  of  the  company,  or  to  be  responsible  for 
their  misconduct,  further  than  to  exercise  such  control  over 
them  as  to  prevent  or  reform  abuses,  by  compelling  them  to 
act  honestly — being  the  same  control  exercised  over  all  other 
persons  within  its  jurisdiction.  The  creditors  of  railroad  cor 
porations  have  no  stronger  claim  on  the  state  in  case  of  the 
non-fulfillment  of  contracts  by  railroad  companies,  or  in  cases 
of  fraudulent  and  dishonest  practices,  than  have  the  creditors 
of  individuals.  If  a  man  worth  §2,000  represents  himself  to 
be  worth  $4,000,  knowing  that  his  representations  are  false, 
and  obtains  credit  upon  his  property  for  twice  its  real  value, 
he  violates  the  law,  can  be  punished  criminally,  and  is  also  re 
sponsible  in  a  civil  action;  but  his  creditor  has  no  claim  upon 
the  state  for  payment  of  the  sum  loaned  or  credit  given  on 
those  representations.  Is  the  claim  different  when  a  railroad 
corporation  is  the  party  obtaining  the  credit  ?  Is  the  state  un 
der  any  greater  obligations  in  one  case  ;than  in  the  other  V 
But  The  Nation  says  the  custom  of  doing  business  on  this  plan 
has  obtained  and  been  in  use  for  thirty  years,  and  from  this 
draws  an  argument  in  favor  of  its  legitimacy.  Does  this  fact 
make  it  honest  ?  or  change  the  relation  of  the  state  to  these 
corporations  ?  A  man  has  followed  horse-stealing  for  thirty 
years,  and  is  at  last  detected ;  he  has  been  in  the  habit  ot  sell- 


444  MONOPOLIES   AND   THE   PEOPLE. 

ing  his  stolen  horses  to  innocent  parties ;  they  have  been  re 
claimed  by  the  owners;  can  the  purchasers,  because  this  thief 
has  so  long  followed  his  pursuit,  claim  compensation  from  the 
state  ?  A  man  obtains  goods  under  false  pretenses,  and  before 
the  owner  can  reclaim  them,  sells  them  to  a  third  party;  can 
the  person  defrauded  claim  compensation  from  the  state  ?  We 
cannot  discover  the  distinction  between  the  cases  stated  and  that 
of  railroad  companies,  who  by  falsely  pretending  that  they  have 
paid  up  their  capital  stock,  obtain  money  on  their  bonds  for  an 
amount  greater  than  the  value  of  their  entire  roads.  They  all 
commit  crimes  for  which  they  are  liable  to  be  punished,  and  all 
are  liable  in  law  to  make  good  their  contracts;  but  in  neither 
case  is  there  any  pecuniary  liability  imposed  upon  the  state  or  the 
public.  Nor  would  the  application  of  the  rule  to  railroad  com 
panies  already  in  existence,  who  have  built  their  roads,  be  "spo 
liation  pure  and  simple."  It  never  can  be  wrong  to  compel 
men  to  do  right.  If  railroad  companies,  by  arbitrarily  increas 
ing  their  capital  stock,  and  issuing  certificates  therefor  without 
payment  of  any  part  of  it,  as  is  the  general  rule  among  them, 
are  receiving  dividends  on  such  stock,  justice  to  the  public  de 
mands  that  the  state  legislatures  should  compel  them  to  purge 
their  stock,  and  at  once  cancel  all  such  spurious  and  illegiti 
mate  issues.  The  duty  the  state  government  owes  to  the  pub 
lic  demands  this,  that  the  oppressions  under  which  the  people 
suffer  may  be  prevented  in  the  future.  But  "it  would  deprive 
men  of  rewards  already  earned  by  running  great  risks."  What 
these  "great  risks"  are,  is  not  readily  seen.  They  certainly 
have  not  risked  their  money ;  they  built  their  roads  on  bor 
rowed  capital,  and  have  declared  dividends  to  themselves  on 
stock  they  have  never  paid.  They  extort  from  the  public,  in 
charges  for  transportation,  money  sufficient  to  pay  the  interest 
on  the  money  borrowed  for  building  their  Broads,  and  to  pay 
dividends  on  their  stock  that  has  not  cost  them  anything,  and 
if  they  have  run  any  risks  they  are  the  same  that  all  men,  wha 
violate  the  law,  have  ventured  upon.  The  pecuniary  risks  are 
all  taken  by  the  parties  from  whom  they  borrow. 

The  Nation  says  that  the  west  during  thirty  years  has  wanted 
railroads,  and  that  there  was  small  chance  of  making  them 
profitable  for  a  long  time.  That  "  it  encouraged  eastern  men 


APPENDIX.  445 

and  foreigners  to  make  them  in  any  way  they  pleased,  run 
ning  whatever  risks  existed,  and  pocketing  whatever  gain 
there  might  be  —  and  they  were  made."  The  people  of  the 
west  have  vivid  recollections  of  the  manner  in  which  the  means 
were  raised  to  make  their  railroads.  They  took  large  amounts 
of  stock,  and  voted  large  amounts  of  local  aid  for  which  they 
were  to  receive  stock  and  dividends.  After  contributing  suffi 
cient  to  pay  at  least  one-half  of  the  entire  cost  of- their  roads, 
their  eastern  friends  mortgaged  their  roads  and  sold  them  out, 
and  the  "  people  of  the  west "  got  neither  stock  nor  dividends, 
but  they  are  to-day  paying  taxes  to  discharge  debts  contracted 
by  them  in  building  their  roads  after  having  been  swindled  by 
their  eastern  friends  out  of  values,  amounting  in  Iowa  alone,  to 
not  less  than  $4,000,000.  The  Nation  further  says  that  "  the  in 
vestment  then  was  one  of  great  danger  and  difficulty ;  to  treat  it 
now  as  one  of  no  difficulty  and  no  danger ,  would  be  simple  swindling." 
This  journal  evidently  knew  but  little  of  the  real  facts  in  the 
case,  or  it  would  not  have  made  this  assertion.  But  if  we  ad 
mit  that  the  undertaking  was  both  dangerous  and  difficult, 
does  that  exempt  from  all  responsibility  the  adventurers  who 
came  west  and  fattened  off  of  the  simplicity  of  the  people? 
Does  it  absolve  them  from  the  effects  of  their  dishonest  acts  ? 
Are  the  states  pledged  to  make  good  the  dishonest  contracts 
of  these  adventurers  because  of  the  danger  or  difficulty  they 
run  ? 

While  the  law  should  regulate  the  action  of  all  railroad  com 
panies,  would  it  be  "  simple  swindling"  for  the  legislature  to 
compel  these  pioneer  adventurers  to  purge  their  companies  of 
fictitious  or  "  watered  "  stock,  or  limit  their  rate  of  charges  ? 
We  do  not  believe  that  the  legislature  ever  intended  to  charter 
railroad  companies  to  prey  upon  the  people  at  pleasure  and 
without  restriction,  nor  is  it  true  that  any  injustice  would  be 
done  in  compelling  companies,  whose  roads  are  constructed, 
to  reduce  their  stocks  to  the  amounts  actually  invested  in  their 
roads,  and  to  limit  their  rates  of  charges  to  a  fair  and  reasona 
ble  compensation  for  the  money  so  invested.  Nor  would  it 
shake  the  foundations  of  social  order  to  compel  these  men  to 
act  honestly. 

But  another  difficulty  is  suggested  in  this  circular.     Our 


446  MONOPOLIES   AND   THE   PEOPLE. 

author  says :  "  It  is  not  possible  for  '  the  people  '  or  anybody 
else  to  ascertain  the  exact  amount,  on  which,  in  abstract  justice, 
the  earnings  ought  to  pay  interest."  True,  it  may  be  hard  to 
ascertain  what  is  the  "  exact "  amount,  but  this  fact  presents 
no  great  difficulty.  It  is  now  known  to  nearly  everybody 
about  what  railroads  cost  per  mile.  When  a  road  that  we 
know,  in  the  nature  of  things,  could  not  have  cost  more  than 
$35,000  per  mile,  is  by  the  "  watering  "  process  shown  to  have 
cost  the  sum  of  $75,000,  it  would  not  be  difficult  to  approxi 
mate  the  amount  of  stock  that  should  be  cancelled ;  nor  need 
the  fact  that  the  exact  amount  cannot  be  ascertained  prevent 
legislative  action.  In  all  cases  a  large  margin  to  cover  any 
doubts  might  be  allowed  to  the  companies,  and  still  great  re 
ductions  could  be  made. 

Fifth.  The  Nation,  as  it  progresses,  becomes  more  earnest. 
It  takes  up  the  oft  repeated  cry  of  "innocent  purchasers," 
"  widows  and  orphans,"  with  their  all  invested  in  railroad  stock. 
"  Charitable  corporations  and  banks  "  have  invested  in  rail 
road  stocks  and  "  helpless  people  generally."  It  tells  us  that 
"  this  stock  has  been  sold  and  resold,  in  open  market,  under 
the  most  solemn  guarantees  known  to  civilized  society,  with 
the  understanding  that  it  represents  the  bona  fide  ownership  of 
the  roads,  with  all  their  earnings,  possible  as  well  as  actual. 
The  laws,  the  courts,  and  public  opinion,  assured  to  it  this 
character  without  reservation  or  qualification. 
To  throw  any  doubt  on  its  value  now  would  be  to  cause  an 
amount  of  misery  and  alarm  which  no  thinking  man  could 
contemplate  without  a  shudder."  That  some  parties  would 
suffer  financially  by  compelling  railroad  companies  to  reduce 
their  stock  to  an  honest  standard  cannot  be  denied,  and  in 
some  cases  it  might  work  absolute  financial  ruin.  But  that 
any  considerable  amount  of  railroad  stock  is  held  and  owned 
by  poor  people  is  rather  improbable,  and  that  "  helpless  peo 
ple  generally  "  deal  in  railroad  stock  is  not  true.  That  some 
purchases  are  made  by  innocent  parties  may  also  be  true ;  yet 
in  this  day  and  age  when  the  fact  that  at  least  one-half  of  all 
railroad  stock  is  mere  fiction  and  has  no  intrinsic  value  is 
known  to  the  public  generally,  a  third  party  must  be  "  inno- 


APPENDIX.  447 

cent "  indeed  to  purchase  it  without  knowing  that  its  value  is 
imaginary  rather  than  real. 

Most  of  the  stocks  and  bonds  of  railroad  companies  are  sold 
in  Wall  Street  by  the  owners  and  managers,  acting  in  their 
character  of  brokers  and  stock  gamblers.  The  innocent  third 
parties  are  generally  the  dupes  of  these  brokers  who  are  on 
the  lookout  for  the  unwary.  These  dupes  are  caught  and 
stripped  and  turned  loose  without  remorse,  when  the  man 
agers  of  the  great  railroad  interests  of  the  country  are  "  loading 
or  unloading,"  and  no  complaint  is  heard.  The  "  innocents  " 
are  robbed  without  exciting  a  passing  remark ;  but  when  an 
attempt  is  made  to  relieve  the  people  from  the  onerous  bur 
dens  imposed  upom  them,  we  hear  on  all  sides  the  cry  of  "  in 
nocent  purchasers !  "  and  of  the  great  wrongs  about  to  be 
committed.  They  virtually  admit  their  own  dishonesty,  but 
say  in  substance  :  "  We  have  duped  others  and  you  must  per 
mit  us  to  rob  the  people  in  order  that  i  innocent '  third  par 
ties  may  not  suiter."  This  is  the  pith  of  The  Nation's  argu 
ment.  It  goes  further,  and  says :  The  law  and  the  courts 
have  sanctioned  this  dishonest  course,  and  because  of  this,  the 
same  raid  upon  the  rights  of  the  people  must  be  allowed  to 
continue  without  interruption. 

Neither  the  people  nor  the  state  are  in  any  manner  respons 
ible  for  the  acts  of 'these  railroad  managers.  All  contracts  for 
the  sale  of  bonds  or  stocks  are  in  the  first  instance  made  with 
the  companies  or  their  agents.  They  are  responsible  to  the 
parties  holding  their  bonds  or  stocks.  Their  roads  are  liable 
to  their  full  value,  and  each  stockholder  is  liable  to  the  amount 
of  stock  he  owns,  and  to  that  extent  must  make  good  the  con 
tracts  made  by  the  managers  of  the  road.  The  purchaser  had 
the  means  of  knowing  the  value  of  the  stock  he  purchased. 
If  he  suffer,  his  suffering  is  the  result  of  the  fraud  of  the  direc 
tors  of  the  road,  and  of  his  own  negligence.  None  of  these 
causes  affect  the  right  of  the  state  to  regulate  the  company, 
and  to  compel  it  to  act  honestly. 

The  cry  of  "  innocent  purchasers  "  will  not  avail.  While 
the  people  can  sympathize  with  those  who  are  defrauded  by 
the  dishonest  acts  of  the  companies,  and  appreciate  the  help 
less  condition  of  widows  and  orphans  who  have  lost  by  railroad 


448  MONOPOLIES   AND   THE   PEOPLE. 

rascality,  the  facts  will  demonstrate  that  they  are  few  in  num 
ber,  unless  we  include  among  the  "widows  and  orphans"  Com 
modore  Vanderbilt,  Col.  Tom.  Scott,  Daniel  Drew,  Jay  Gould, 
and  the  Wall  street  brokers  generally,  who  own  and  control 
most  of  the  railroad  stocks.  If  we  admit  all  that  is  stated  in 
the  circular,  the  right  of  the  people  to  be  protected  against  the 
impositions  and  oppressions  of  the  railroad  companies  remains 
unchanged,  and  the  legislature,  acting  for  the  whole  people, 
can  control  the  management  of  the  companies  so  far  as  it 
affects  the  public.  If  the  doctrine  advocated  by  the  circular 
be  true,  railroad  corporations  are  now  able  to  defy  the  govern 
ment  and  the  people. 

Sixth.  The  Nation,  in  its  circular  letter,  says:  "If  the  state 
wants  to  make  the  railroads  common  highways,  it  has  the  right 
to  take  them,  but  at  their  market  value,  paying  the  owners 
what  other  people  would  pay  them,  and  not  inquiring  curiously 
and  knavishly  into  their  original  cost.  Between  honest  par 
ties  to  a  bargain,  that,  to  use  a  common  phrase,  is  neither  here 
nor  there."  We  get  more  light  as  we  advance.  As  we  un 
derstand  the  principles  of  our  government,  the  states  possess 
the  right  of  eminent  domain.  But  the}7  have  no  power  to  buy 
and  sell,  like- corporations  or  individuals.  They  may  condemn 
private  property  for  public  use,  if  the  public  good  requires  it. 
The  value  of  property  for  public  use  is  ascertained  in  the  man 
ner  prescribed  by  statute.  The  Nation  is  inconsistent.  It  says 
in  one  paragraph  that  the  state  has  no  lawful  right  to  regulate 
railroads  and  restrict  the  action  of  railroad  companies  in  the 
issuing  of  stock,  etc.,  and  then  declares  that  the  state  can  take 
the  railroads  from  the  companies  should  it  desire  to  do  so. 
But  for  cool  assurance  The  Nation  is  entitled  to  the  champion 
belt  when  it  says  the  state  must  take  the  roads  at  their  market 
value — at  what  other  people  would  pay  for  them — without  in 
quiring  "  curiously  and  knavishly  "  into  the  original  cost !  In 
other  words,  these  corporations  are  so  potent  that  should  the 
state  attempt  to  exercise  its  right  of  eminent  domain,  they 
can  dictate  the  terms  upon  which  they  would  be  willing  to 
surrender  their  roads  to  the  public.  The  terms  are  that  the 
state  must  pay  the  companies'  value  for  all  the  watered  stock 


APPENDIX.  449 

with  which  they  have  loaded  their  roads,  as  well  as  for  all  the 
bonds  the  companies  have  sold,  and  do  this  without  asking  ques 
tions.  If  the  people  or  the  states  should  stop  to  inquire  into 
their  cost,  they  would  be  acting  knavishly.  True,  the  com 
panies  could  not  build  their  roads  without  special  grants  from 
state  legislatures,  but  having  obtained  the  privilege  of  locating 
their  roads  where  they  please'd,  and  having,  by  false  pretences, 
obtained  local  aid  and  defrauded  the  people  who  helped  to 
build  the  roads  ;  having  piled  up  their  fictitious  stock  by  the 
billion,  and  by  onerous  and  dishonest  charges  reduced  the 
farming  population  to  poverty,  their  champion,  The  Nation, 
tells  the  states  :  "If  you  want  the  railroads,  you  can  take  them, 
but  you  must  not  be  curious  to  know  what  they  cost ;  this 
would  be  a  knavish  act ;  you  can  have  them  by  paying  the 
companies  the  full  amount  of  money  they  claim  to  have  in 
vested,  including  fictitious  and  watered  stock."  This  kind  of 
impudence  is  sublime.  The  railroad  companies,  through  this 
hired  spokesman,  propose  to  quit  business  provided  the  states 
will  pay  them  just  what  they  are  pleased  to  call  the  value  of 
their  roads,  and  ask  no  questions.  It  is  usual  for  the  thief, 
when  seeking  immunity  for  his  crimes,  to  propose  to  return  a 
part  of  the  stolen  property,  but  these  corporations,  who  have 
been  robbing  the  states  and  the  people  for  years,  offer  to  close 
their  career  by  forcing  upon  the  parties  robbed  what  is  left  of 
their  booty,  provided  the  states  will  pay  to  them  not  only  the 
cost  of  the  roads,  but  allow  them  par  value  for  all  their  bogus 
or  fictitious  stock. 

They  propose  to  compel  the  states  to  adopt  a  new  rule  — 
the  rule  that  governs  operations  in  Wall  street.  They  will 
"  bull "  their  stock  to  the  highest  point,  and  force  the  states  to 
purchase  at  these  high  figures.  The  Nation  says  that  "  The 
people  ought  undoubtedly  to  have  looked  forward  a  little  when 
they  first  began  to  grant  charters  ;  but,  not  having  done  so, 
they  ought  not  now  throw  on  others  the  whole  damage  done 
by  their  own  laches.7''  The  conclusion  is  that  because  they 
dealt  with  railroad  companies  as  they  deal  with  honest  men, 
and  did  not  provide  in  advance  for  the  punishment  of  all  con 
ceivable  dishonest  practices  on  the  part  of  the  officers  of  the 
companies,  therefore  the  people  are  the  guilty  parties  and  should 
56 


450  MONOPOLIES    AND    THE    PEOPLE. 

reward  the  innocent  railroad  companies  by  paying  them  real 
dollars  for  the  imaginary  dollars  they  have  added  to  their  stock. 
The  railroad  companies  took  an  undue  advantage  of  the  peo 
ple,  but  that  is  "  neither  here  nor  there ;"  the  companies  must 
get  from  the  states  all  that  they  please  to  demand  for  their 
roads.  This  is  the  "common  sense"  The  Nation  presents  to 
the  people. 

The  power  of  the  states,  under  the  constitution,  to  purchase, 
is  not  doubted  by  this  advocate  of  the  railroad  interest,  nor 
does  he,  in  his  "  common  sense,"  coneider  the  immense  tax 
that  the  purchase  of  the  railroads  would  entail  upon  the 
people. 

Seventh.  The  Nation  says  that  "Much  of  the  outcry  over  the 
high  rates  charged  by  railroads  is  due  to  an  immense  but 
deeply-seated  popular  delusion  as  to  the  value  of  railroad 
property."  The  reader  is  then  referred  to  Poor's  Railroad 
Manual  for  the  value  of  railroad  property,  but  The  Nation  fails 
to  state  that  in  this  Manual  the  value  of  all  railroads  is  given 
as  furnished  by  the  companies  themselves;  it  includes 
all  their  watered  stock  and  bonds  with  which  the  roads  are 
"  loaded,"  and  does  not  purport  to  give  the  actual  cost  of  any 
road.  The  book,  too,  is  published  in  the  interest  of  the  com 
panies,  and  for  the  purpose  of  inflating  rather  than  giving  the 
true  value  of  the  roads.  From  this  Manual  it  appears  that 
dividends  do  not  average  more  than  five  per  cent  on  the  stock. 
When  it  is  remembered  that  every  dollar  invested  in  railroads 
(taking  all  the  roads  in  the  United  States)  represents  |two 
additional  dollars,  or  that  by  the  increase  of  stock  and  issuing 
of  bonds,  the  reported  cost  is  three  times  the  actual  cost  of  the 
roads,  a  dividend  of  five  per  cent  is  equivalent  to  fifteen  per 
cent  on  the  actually  paid-up  honest  capital,  it  would  appear 
that  The  Nation,  and  not  the  people,  is  laboring  under  "  a  deep- 
seated  delusion."  The  Nation  is  not  informed  upon  the  sub 
ject,  or  desires  to  present  an  unfair  view  of  it.  In  the  Manual 
to  which  reference  is  made,  the  New  York  organ  will  find  the 
statement  that  railroads  can  afford  to  carry  freights  for  one  and 
one-fourth  per  cent  per  ton  per  mile.  This  is  their  own  state 
ment.  What  are  their  charges?  Recently  they  have  been 


APPENDIX.  451 

reducing  their  rates.     As  published,  old  rates  from  New  York 
to  Chicago  were  one  dollar  per   hundred-weight.      This  has 
been  reduced  to  seventy-five  cents  by  the  managers    of  the 
Grand  Trunk  lines.     By  the  new  scale  the  rates  charged  are 
about  double  what  the  Manual  fixes  as  "paying,"  and  yet  The 
Nation  thinks  that  because  the  farmers  desire  lower  rates,  the 
question  of  reduction  assumes  a  "  somewhat  ludicrous  aspect." 
We  are  advised  to  examine  Poor's  Railroad  Manual  before  we 
permit  our  minds  to  be  filled  with  revolutionary  notions  about 
railroads.     The  farmer  should  presume  that  the  advantage  is 
all  on  his  side  when  railroad  companies  charge  him  only  sev 
enty-five  cents  for  carrying  a  bushel  of  wheat  from  Iowa  to 
New  York,  and  that  at  present  rates  railroad  companies  are 
making  little  or  nothing,  and  are  running  great  risks.     These 
are  proper  deductions  from  the  circular  of  The  Nation.     Hav 
ing  presented  the  whole  case  to  its  own  satisfaction,  it  gives 
reign  to  fancy,  and  says :    "  Now  fancy  anybody  seriously  pro 
posing  to  capitalists  to  construct  railroads,  as  most  of  the  west 
ern  railroads  were  constructed,   through  a  howling   'wilderness, 
for  the  chance  of  five  and  a  half  per  cent  whenever  the  earnings 
of  the  road  allowed  it ;    and  fancy  what  subjects  for  spoliation 
are  presented  by  these  bloated  owners  of  railroad  property, 
who  pocket  on  the  average  less  than  four  per  cent  on  the  par 
value  of  their  stock" — to  which  we  might  add,  "  including  more 
than  one  billion  of  dollars  for  which  they  never  paid  one  cent." 
The  fact  that  these  self-denying  railroad  men  are  constantly 
extending  their  roads,  buying  and  leasing  all  that  they  can  get 
control  of,  for  the  purpose  of  more   effectually  controlling  the 
government  and  enslaving  the  people,  and  are  devoting  all  the 
earnings  of  their  roads  to  these  objects,  are  not  deemed  wor 
thy  of  notice  by  this  champion  of  the  railroad  interest.     We 
know  as  a  fact,  that  the  leading  and  controlling  railroad  men 
are  spending  their  whole  energy  and  their  mone}<  to  this  end. 
These  men  are  fast  consolidating  the  whole  railroad  interest. 
We  also  know,  that  companies  that  are  content  to  divide  their 
earnings,  rather  than   extend  their  roads,  make  large    divi 
dends,  and  leave  a  surplus  to  be  capitalized.     The  "  common 
sense "  of  The  Nation  does  not  strike  us  with  its  intended 
force.     The  Nation  evidently  has  but  a  limited  knowledge  of 


452  MONOPOLIES   AND   THE    PEOPLE. 

the  west.  The  fancy  sketch  of  self-denying  railroad  men  con 
structing  railroads  "  through  a  howling  wilderness"  is  finely 
drawn  ;  but  it  exists  only  in  the  mind  of  The  Nation.  If  this 
writer  had  been  speaking  of  the  mountain  gorges  and  desolate 
pine  plains  which  vex  and  impoverish  the  Boston  &  Albany 
track  from  Albany  to  Worcester,  he  might  be  excused  for  his 
words  ;  but  the  "  howling  wilderness  "  does  not  apply  to  the 
cultivated  prairies,  whose  enterprising  farmers  helped  to  build 
the  roads  now  so  bitterly  and  justly  complained  of,  and  it  de 
scribes  the  domain  of  no  western  road  save  where  the  compa 
nies  obtained,  through  legislative  and  congressional  aid, 
enough  of  the  people's  land  to  construct  the  roads. 

Eighth.  As  a  last  point  The  Nation  says,  that  "  no  corpora 
tion  should  be  restricted  by  law  to  a  certain  rate  of  earnings 
unless  it  consents  freely  to  do  such  work  on  those  terms,  or 
has  a  minimum  guaranteed  to  it  by  the  state."  The  state  pos 
sesses  no  power  to  guarantee  to  any  private  corporation  any 
rate  of  dividends ;  nor  would  it  be  just  to  compel  the  people 
to  donate  a  part  of  their  earnings  to  railroad  companies,  or  to 
any  other  private  parties.  In  our  judgment,  the  state  has  the 
constitutional  right  to  regulate  and  control  all  private  corpora 
tions  and,  when  the  good  of  the  public  demands  it,  to  restrict 
the  rates  charged  by  railroad  companies  for  carrying  freights 
and  passengers.  We  admit  that  "the  questions  connected 
with  the  regulation  of  railroads  are  questions  of  morality,  in 
their  highest  and  most  important  phases,  the  settlement  of 
which  must  touch  the  security  of  all  property,  and  affect  the 
value  of  constitutions  as  safeguards  of  individual  rights."  We 
go  further,  and  say  that  in  the  management  of  railroads,  and 
the  favors  shown  to  the  companies,  the  constitutional  rights  of 
individuals  have  already  been  measurably  destroyed,  and  that 
the  most  important  question  now  is,  How  can  those  rights  be 
restored  and  no  injustice  be  done  to  railroad  companies  ?  These 
questions  we  have  already  discussed,  and  will  only  add  that 
the  sole  remedy  to  be  applied  is  legislative  limitation  and  re 
striction.  The  abuses  now  practiced  by  railroad  companies 
must  be  corrected.  The  legislatures  have  the  power  and  it  is 
their  duty  to  restrict  the  scale  of  charges  to  such  rates  as  will 


APPENDIX.  453 

afford  a  fair  remuneration  to  the  companies  on  their  invest 
ments,  and  at  the  same  time  protect  the  people  from  the  ex 
tortions  of  soulless  corporations.  This  power  can  be  exercised 
over  the  companies  now  in  being  as  well  as  over  those  to  be 
hereafter  organized. 

We  have  devoted  this  chapter  to  an  examination  of  the  views 
of  The  Nation  for  the  reason  that,  in  the  form  of  a  circular, 
they  have  been  widely  distributed,  and  are  designed  to  distract 
and  divide  those  who  are  seeking  relief  from  the  oppressions 
of  this  railroad  monopoly,  and  because  the  writer  treats  the 
"Farmers'  Movement,"  the  "Grangers,"  and  "the  people" 
with  undisguised  derision  and  contempt.  The  farmers  are 
characterized  as  a  mob  of  politicians  —  an  irresponsible  body 
—ignorant  and  careless  of  the  rights  of  others,  and  repre 
sented  as  claiming  a  superiority  to  courts  and  laws.  The  idea 
that  the  people,  farmers,  or  grangers  have  not  sufficient  knowl 
edge  to  take  the  lead  in  any  attempt  to  reform  the  abuses  un 
der  which  they  suffer,  is  put  prominently  forth.  The  attempt 
at  reform  in  Illinois  is  referred  to  in  the  following  words,  in 
speaking  of  the  remedy  for  present  abuses :  "  How  far  we  are 
from  both  (?'.  e.9  ascertaining  and  applying  the  remedy)  is  best 
shown  by  the  Illinois  attempt  at  reform,  which  consists  at 
present  in  taking  the  working  of  the  roads  out  of  the  hands  of 
the  exceedingly  able  body  of  trained  business  men  who  have 
charge  of  it,  and  compelling  them  to  use  a  crazy  table  of 
'  rates '  drawn  up  by  a  mob  of  excited  and  ignorant  politi 
cians."  The  prevailing  notion  which  has  obtained  in  some 
parts  of  the  country,  that  farmers  and  working  men  are  not 
qualified  to  act  in  matters  of  a  public  nature,  is  reflected 
throughout  the  circular,  and  the  rights  and  privileges  of  rail 
road  corporations  are  spread  before  the  reader  in  what  is 
termed  a  "  common  sense  "  manner.  The  object  of  all  this  is 
apparent :  It  is  to  impress  upon  the  public  mind  the  idea  that 
the  people  are  not  equal  to  the  occasion,  and  that  no  reform 
can  be  effected. 


CHAPTER  VI. 


THE   INFLUENCE    OF    MONOPOLIES    UPON    LABOR. 


IT  is  a  self-evident  proposition,  that  the  wealth  of  a  coun 
try  lies  in  its  products,  and  that  the  quantity  of  its  pro 
ducts  depends  directly  upon  the  amount  of  labor  em 
ployed.  The  diverse  interests  and  pursuits  in  our  country 
afford  opportunity  for  the  employment  of  an  immense  number 
of  laborers.  Indeed,  the  persons  employed  in  manual  labor  in 
the  various  industrial  pursuits  of  the  country  number  more 
than  one-half  of  the  whole  population.  This  great  army  of 
laborers  is  engaged  in  agricultural  and  horticultural  pursuits ; 
its  rank  labors  in  shops,  factories,  furnaces,  mines,  stores,  and 
offices,  upon  railroads  and  canals,  and  in  vessels,  and  in  the 
numerous  other  relations  requiring  their  services.  Theiv  right 
to  fair  remunerative  prices  for  their  labor  is  admitted  by  all. 
Whether  that  remuneration  is  paid  in  money,  as  when  the 
labor  is  hired,  or  shares  in  the  product  of  its  creation,  the 
workman  should  receive  a  just  reward  for  his  services.  No 
onerous  taxes,  duties,  or  restrictions,  should  be  imposed  upon 
labor.  The  profits  derived  from  labor  should  belong  to  the 
laborer.  When  capital  and  labor  unite  in  producing,  a  fair 
division  of  the  product  should  be  made.  Any  system  that 
gives  the  whole  product  to  the  capitalist,  except  the  small  sti 
pend  paid  for  the  time  the  laborer  is  employed,  is  oppressive. 
We  are  not  an  advocate  of  a  division  or  distribution  of  the 
wealth  of  the  country  among  all  classes  and  pursuits,  but  con 
tend  that  it  is  but  just  that  the  operatives  in  the  factory,  the 
forgers  of  the  foundry,  the  skilled  artificers  of  the  machine 
shop,  the  miners  who  extract  wealth  from  the  earth,  the  labor 
ers  who  build  and  operate  railroads,  canals,  etc.,  and,  in  short, 
all  whose  work  and  skill,  combined  with  capital,  produce  a 
profit,  should  receive  a  fair  proportion  of  the  profit  thus  ere- 


APPENDIX.  455 

ated.  Prosperity  and  contentment  can  only  be  found  where 
all  industrial  pursuits  prove  remunerative ;  where  manual 
labor  not  only  supports  the  laborer,  but  enables  him  to  acquire 
a  competence  in  process  of  time.  That  division  of  labor  and 
capital  which  compels  the  laborer  to  toil  daily  to  keep  want 
from  his  door,  and  is  so  inflexible  that  the  sickness  of  a  single 
day  entails  the  loss  of  necessaries  to  his  family,  is  a  species  of 
slavery.  When  by  the  customs  of  the  country,  or  by  its  laws, 
the  line  dividing  labor  and  capital  is  so  clearly  defined,  that 
the  laborer,  by  a  life-time  of  toil,  can  accumulate  nothing, 
while  the  capitalist  employing  him  realizes  from  ten  to  one 
hundred  per  cent  per  annum  upon  the  amount  invested,  the 
one  is  but  coining  the  life-blood  of  the  other,  and  the  laborer 
is  but  little  better  than  a  bond-servant.  From  time  immemo 
rial,  those  who  obtain  their  support  by  manual  labor  have  re 
ceived  less  attention  from  government  than  any  other  class. 
Indeed,  in  all"  nionarchial  governments  they  are  left  out  of 
consideration,  except  as  their  labor  can  be  made  useful  in  ad 
vancing  the  interests  of  the  superior  classes.  In  our  own  coun 
try  there  has  existed  a  prejudice  against  the  laboring  classes. 
Especially  was  this  so  in  the  south  until  the  abolition  of  slave 
ry.  As  a  nation,  we  have  been  apt  to  follow  old  opinions,  and 
look  upon  labor  as  degrading,  and  the  laborer  as  a  menial. 
This  prejudice  still  exists  to  a  great  degree,  and  our  boys  seek 
speculative  rather  than  legitimate  industrial  employments. 
While  in  theory  all  men  are  considered  equal  in  our  country, 
practically  the  old  feudal  distinction  is  kept  up.  We  have  no 
titled  aristocracy  in  America,  but  we  are  fast  creating  an  aris 
tocracy  of  wealth  and  pursuits.  While  labor  is  the  motive- 
power,  and  manual  laborers  the  engineers  who  keep  the  car  of 
progress  moving  forward,  they  receive  less  consideration  from 
the  hands  of  government  than  the  loungers  and  speculators. 
While  acts  of  congress  and  state  legislatures,  designed  to  ben 
efit  the  wealthy  capitalists,  are  of  frequent  date,  but  few  can 
be  found  designed  or  enacted  in  the  interest  of  the  laboring 
classes.  Special  legislation  in  favor  of  the  capitalists,  corpora 
tions,  and  manufacturers,  has  been  the  rule  ;  legislation  in  the 
interest  of  the  laboring  classes  the  exception.  The  dignity  that 
should  attach  to  labor  is  entirely  wanting,  and  the  respect  the 


456  MONOPOLIES   AND   THE    PEOPLE. 

laborer  should  command  is  not  accorded  to  him.  Not  that  he 
is  looked  upon  as  the  inferior  of  other  men,  but  that  in  all 
matters  affecting  the  public  welfare,  the  interests  of  the  capi 
talist,  the  large  operator,  the  banker,  manufacturer,  and  cor 
porations  generally,  claim  special  attention,  while  the  real 
wealth-producing  portion  of  the  people  is  neglected.  This  is 
not  the  result  of  any  design  on  the  part  of  those  engaged  in 
other  pursuits  —  it  results  from  the  fact  that  capital  pays  par 
ticular  attention  to  its  own  interests,  while  labor  is  content  to 
let  other  interests  take  control  of  the  government,  of  all  public 
matters,  and  of  even  its  own  pursuits,  quietly  accepting  a  sec 
ondary  position,  and  neglecting  to  claim  the  consideration  and 
respect  to  which  it  is  entitled  from  its  intimate  connection 
with  the  capital  of  the  country  and  the  body  politic. 

The  laborer's  political  existence  is  seldom  felt  save  a  elec 
tions,  when  the  strongest  vote  decides  the  day,  and  then  gen 
erally  in  the  blind  following  of  its  file  leaders.  The  reforms 
promised  to  labor  on  these  occasions  are  seldom  realized,  and 
the  laborer,  without  asserting  his  rights  as  a  freeman,  is  too 
apt  to  continue  in  the  old,  beaten  track,  sometimes  complain- 
ingly,  it  is  true,  but  willing  and  ready  to  be  directed  by  his 
party  or  employer,  whenever  his  help  is  needed.  All  of  which 
is  calculated  to  widen  the  line  dividing  capital  and  labor,  and 
to  increase  the  wealth  and  power  of  the  capitalist, 

Let  us  illustrate  :  The  capitalist  is  engaged  in  manufactur 
ing,  and  wishes  protection  from  the  government.  The  ques 
tion  of  protective  tariffs  is  one  of  the  issues  of  the  campaign. 
He  employs  one  hundred  voters.  He  makes  known  to  them 
his  wishes,  and  explains  to  them  the  benefits  he  expects  to  re 
ceive.  They  wish  to  oblige  their  employer  and  accept  his 
views  as  correct,  and  all  cast  their  votes  for  what  they  are  led 
to  believe  will  be  his  benefit.  They  are  not  less  intelligent 
than  other  men,  but  instead  of  acting  independently  they  wish 
to  please  their  employer.  By  this  act,  they  involuntarily  take 
an  inferior  place  among  men,  and  lower  their  dignity.  While 
they  have  by  their  action  enabled  the  manufacturer  to  increase 
his  gains,  by  the  success  of  a  protective  tariff,  they  have  se 
cured  nothing  for  themselves,  not  even  an  advance  of  wages, 
unless  their  employer  voluntarily  allows  such  an  advance.  He 


APPENDIX.  457 

is  aided  by  legislative  enactment  through  their  votes,  and  can 
demand  additional  profit  for  the  product  of  their  labor ;  but 
the  act  is  of  no  personal  benefit  to  them.  All  they  receive,  if 
anything,  is  voluntarily  allowed  by  the  capitalist  employing 
them.  Had  they  examined  for  themselves  they  might  have 
discovered  that  the  act  which  benefited  him  was  detrimental 
to  their  own  interests.  The  same  illustration  will  apply  to  all 
pursuits  requiring  capital  and  labor.  The  consolidation  of  any 
business  so  as  to  destroy  or  prevent  competition  is  detrimental 
to  the  interests  of  labor.  Monopolies,  of  whatever  kind,  are 
encroachments  upon  the  interests  of  those  who  depend  upon 
manual  labor  for  support. 

Railroad  corporations  in  the  United  States  employ  not  less 
than  two  hundred  thousand  men.  This  large  number  of  men 
have  no  interest  in  these  corporations  excepting  the  wages 
paid  to  them.  Subtract  the  sums  they  so  receive,  and  their 
daily  labor  still  adds  to  the  wealth  of  these  powerful  corpora 
tions.  They  are  employed  to  perform  manual  labor ;  they  are 
free  and  independent  citizens  of  this  republic.  Their  employ 
ers  do  not  have  any  claim  upon  them  for  anything  but  their 
labor.  Yet,  as  a  general  rule,  in  all  matters  affecting  the  in 
terests  of  railroad  corporations,  when  the  issue  is  made  at  the 
ballot  box,  these  men  are  found  voting  as  their  employers  de 
sire,  too  often  without  giving  the  matter  due  attention,  and 
not  unfrequently  in  support  of  measures  which  are  at  war 
with  their  own  best  interests.  In  thus  voting  they  are  influ 
enced  by  what  they  deem  proper  motives;  they  desire  to 
gratify  their  employers.  This  state  of  things  is  also  most 
strikingly  presented  in  local  and  municipal  elections,  when 
certain  measures  are  to  be  carried.  In  such  cases,  as  a  gen 
eral  rule,  the  person  or  officer  controlling  or  employing  men 
votes  them  "solid"  on  the  side  of  the  question  he  supports. 
In  the  cases  we  have  given,  as  well  as  in  all  others  of  a  like 
character,  where  any  combination  or  corporation  desires  to 
influence  or  carry  certain  measures,  the  undivided  support  of 
the  employes  is  expected.  So  long  has  this  manner  of  voting 
been  practiced,  it  has  grown  into  a  custom ;  for  the  employe, 
if  he  refuses  to  observe  it,  does  so  at  the  risk  of  losing  his 
employment.  We  have  referred  to  these  things,  not  for  the 
57 


458  MONOPOLIES   AND  THE   PEOPLE. 

purpose  of  showing  that  the  men  eagaged  in  manual  labor  are 
inferior  to  other  men,  or  to  prove  that  they  act  from  improper 
motives,  hut  to  demonstrate  our  proposition  that  they  do  not 
think  and  act  independently  in  matters  of  public  concern,  and 
are  indifferent  to  their  own  best  interests.  That  while  other 
interests  procure  special  favors  from  government,  the  laboring 
classes  are  content  to  occupy  an  inferior  position,  and  even 
give  their  support  to  measures  tending  to  degrade  rather  than 
to  ennoble  them.  Because  of  these  things,  the  laboring  classes, 
as  a  general  rule,  are  treated  by  those  who  are  getting  control 
of  the  capital  and  business  of  the  country  as  inferior  beings, 
and  labor  is  not  classed  by  them  as  of  honorable  calling. 

The  creation  of  privileged  classes  in  our  country  is  to  be 
deprecated.  The  centralization  of  wealth  and  the  grading  of 
the  standing  of  men  by  the  amount  of  money  they  possess ; 
the  creation  of  great  corporations,  with  power  to  control  the 
business  and  finances  of  the  country,  now  threaten  to  overthrow 
our  republican  institutions.  But  equally  to  be  dreaded  is  the 
indifference  manifested  by  the  laboring  classes  in  asserting 
and  protecting  their  rights.  Practically,  so  far  as  the  business 
of  the  country  is  concerned,  the  line  between  capital  and  labor 
is  now  sharply  drawn,  and  in  the  administration  of  the  govern 
ment,  the  old-time  dogma,  that  the  class  controlling  the 
wealth  of  the  country  should  rule,  while  those  who  labor  for 
a  support  are  to  remain  "  hewers  of  wood  and  drawers  of 
water,"  is  fast  assuming  tangible  form,  and  unless  the  far- 
reaching  and  grasping  policy  of  monopolies  is  checked  by  the 
laboring  and  producing  classes,  the  absolute  control  of  the 
government  will  pass  from  the  people  into  the  hands  of  their 
oppressors.  By  the  action  of  railroad  corporations;  the 
special  legislation  in  favor  of  certain  interests ;  the  monopolies 
given  to  manufacturers,  and  the  action  of  the  Wall  street 
brokers,  the  wealth  of  the  country  has  become  centralized, 
and  is  controlled  by  and  in  the  interests  of  the  monopolists, 
who,  because  of  their  combinations,  also  control  the  value  of 
labor  throughout  the  country.  The  influence  of  the  laboring 
classes  is  made  to  subserve  the  purposes  of  monopolists.  The 
manufacturer,  protected  by  government,  enjoys  all  the  profit 
accruing  from  the  labor  of  the  operatives,  and  uses  the  influ- 


APPENDIX.  459 

ence  incident  to  his  position  to  strengthen  his  interests  by  con 
trolling  their  suffrages. 

In  all  the  different  labor-employing  pursuits,  the  political 
privileges  enjoyed  by  the  employe  are  directed  and  controlled 
by  the  employer  in  his  own  interest;  the  whole  mental  and 
physical  structure  of  the  laborer  is  used  in  advancing  his  em 
ployer's  interest.  Because  of  this  law  of  capital,  the  compar 
atively  few  men  now  controlling  the  railroads  of  the  country, 
our  manufacturers  and  other  great  interests  which  have  become 
the  special  favorites  of  those  in  power,  have  obtained  an  almost 
unlimited  influence  over  the  best  interests  of  the  country. 
They  have  been  able  to  entrench  themselves  in  their  strong 
holds,  and  compel  all  the  agricultural,  the  commercial  and 
other  industrial  pursuits  to  contribute  to  their  already  danger 
ous  power.  The  great  army  of  laborers,  instead  of  controll 
ing  the  political  affairs  of  the  country  in  their  own  interest, 
become  the  instruments  in  the  hands  of  the  monopolists  of 
their  own  oppression.  With  sufficient  strength  to  shape  the 
whole  policy  of  the  government  they  are  content  to  let  others 
control  them,  while  they  toil  from  day  to  day  for  the  small 
compensation  allowed  them,  and  derive  no  benefit  from  the 
proceeds  of  their  labor. 

If  the  capital  and  labor  of  the  country  were  combined,  so 
that  the  products  could  be  divided  and  a  fair  proportion  allowed 
to  the  laborer,  his  social  and  financial  condition  would  be  im 
proved,  and  the  power  of  the  few  who  now  control  the  govern 
ment  in  their  own  interest  would  be  destroyed.  While  the 
duty  of  providing  for  himself  and  family  is  imposed  upon 
every  one,  in  this  country  every  citizen  has  another  important 
duty  to  perform  :  the  duty  of  aiding  in  the  preservation  of  re 
publican  government  and  the  equal  rights  of  all  the  people. 
Those  who  become  indifferent  to  these  objects  and  duties,  and 
allows  selfish  or  ambitious  men  to  get  the  control  of  the  gov 
ernment,  and  prostitute  it  to  their  own  purposes,  are  the  au 
thors  of  their  own  sufferings.  And  those  who  permit  them 
selves  to  become  instruments  in  the  hands  of  the  people's  op 
pressors  for  the  continuance  of  oppression,  commit  great 
wrongs  to  themselves  and  their  country. 

The  public  opinion  that  accords  to  the  Wall  street  stock 


460  MONOPOLIES   AND   THE    PEOPLE. 

gambler  a  place  among  honorable  men,  and  allows  him  to 
shape  the  financial  policy  of  the  country,  that  allows  him  to 
live  outside  of  prison  walls,  is  corrupted  and  perverted.  Yet 
there  is  no  class  of  men  in  the  whole  country  who  have  so 
great  an  influence  over  the  government  and  the  commercial 
and  financial  interests  as  the  Wall  street  brokers. 

No  class  of  citizens  should  command  greater  respect  than 
that  engaged  in  manual  labor,  nor  should  any  other  class  exer 
cise  a  more  potent  influence  in  the  nation  ;  yet,  as  a  matter  of 
fact,  no  class  receives  so  little  consideration  or  has  less  influ 
ence  in  national  affairs.  While  great  interests  with  concentrated 
wealth,  requiring  no  special  aids  from  government,  are  con 
stantly  receiving  them,  the  interests  of  the  laboring  and  pro 
ducing  classes  receive  no  special  care  or  attention.  While 
railroad  corporations  and  other  great  monopolies  are  vigilant 
in  protecting  and  strengthening  their  interests,  the  laboring 
classes  are  indifferent  as  to  what  is  to  be  their  future. 

While  other  interests  are  extending  their  influence,  the  in 
terests  of  the  laborers  are  neglected,  and  the  laborers  them 
selves  are  content  to  occupy  inferior  places  in  the  body  politic. 
While  labor  is  the  means,  and  the  laborer  the  power  that  devel- 
opes  and  enriches  the  country,  the  interests  of  the  laborers  lan 
guish,  while  those  of  the  speculator,  the  stock  broker,  and 
capitalist,  prosper.  Before  we  can  become  a  prosperous,  con 
tented,  and  happy  people,  all  honorable  pursuits  must  have 
equal  rights  before  the  law.  Specia:  and  class  legislation  must 
be  abandoned,  and  the  dignity  of  labor  must  be  fully  vindica 
ted. 

But  it  may  be  asked,  How  are  these  things  to  be  accom 
plished?  We  answer:  1st.  By  laborers  asserting  their  right 
to  think  and  act  as  independent  men ;  by  giving  their  employ 
ers  to  understand  that  they  do  not  hire  their  intellects,  their 
rights  as  citizens,  but  only  their  physical  force ;  that  while  they 
labor  for  their  employers,  they  preserve  their  individuality  and 
self-respect;  by  giving  their  employers  to  understand  that  they 
are  only  paid  for  manual  labor,  and  that  they  are  not  bonds 
men.  2d.  By  demanding  for  labor  such  remuneration  as  will 
allow  the  laborer  to  share  in  the  profits  resulting  from  his  toil, 


APPENDIX.  461 

either  by  treating  it  as  an  investment  in  the  business  in  which 
it  is  employed,  or  by  the  payment  of  such  compensation  as 
will  allow  a  surplus  for  investment  —  refusing  to  wear  out  their 
lives  in  procuring  a  bare  subsistence.  3d.  By  the  diffusion  of 
knowledge  among  the  laboring  classes,  especially  of  the  theory 
and  objects  of  our  government,  and  the  relation  sustained  by 
the  laboring  classes  to  the  government,  and  by  demanding  for 
themselves  due  respect  and  consideration  on  the  part  of  those 
engaged  in  other  pursuits ;  by  demanding  of  legislatures  and 
of  congress  the  enactment  of  such  statutes  as  shall  not  impose 
taxes  upon  their  labor  for  the  benefit  of  other  pursuits,  and 
such  as  shall  require  all  taxes  levied  for  any  purpose  to  be  lev 
ied  upon  the  property  and  not  the  labor  of  the  country.  4th.  By 
demanding  the  unconditional  repeal  of  all  statutes  which  con 
fer  upon  individuals,  classes,  companies,  corporations,  or  call 
ings,  special  bounties,  grants,  privileges,  or  profits  which  in 
their  operations  act  oppressively  upon  the  laboring  and  pro 
ducing  classes.  And  lastly,  to  strive  to  eradicate  the  ancient 
and  continuing  prejudice  against  labor,  and  to  vindicate  the 
truth  of  the  often  repeated  declaration  of  eminent  men:  "  That 
the  person  engaged  in  manual  labor  is  following  the  most  an 
cient  as  well  as  the  most  noble  calling." 

These  objects  can  all  be  accomplished  by  united  and  intelli 
gent  action.  The  false,  yet  popular,  idea  that  a  man's  respect 
ability  among  his  fellows  is  graduated  by  the  extent  of  his 
possessions,  and  his  political  standing  scaled  by  the  amount  of 
his  money,  can  be  obliterated,  and  merit  alone  will  become 
the  rule  by  which  to  measure  the  man.  The  laboring  man 
with  intellect  and  personal  merit  will  supersede  the  man  who 
has  money  but  lacks  mind,  in  the  social  and  political  world. 

When  the  laboring  classes,  including  the  farmers  and  me 
chanics,  shall  boldly  step  into  the  front  ranks  they  will  make 
the'ir  influence  felt;  reforms  will  be  the  order  of  the  day; 
trading  and  dishonest  politicians  will  be  suffered  to  go  into  re 
tirement  ;  courts  committed  to  the  interests  of  monopolies  will 
be  reformed,  and  the  law  will  be  administered  by  judges  who 
will  not  pervert  the  plain  letter  and  spirit  of  the  constitution 
for  the  purpose  of  upholding  unjust  laws;  the  monopolists 


462  MONOPOLIES   AND   THE    PEOPLE. 

who  now  rule  and  ruin  the  country  will  be  shorn  of  their  power, 
the  producer  and  laborer  will  receive  for  their  labor  and  pro 
ducts  fair  value  in  money,  and  will  not  be  obliged  to  receive 
payment  in  depreciated  paper,  while  the  speculator,  the  broker, 
and  the  government  buy  and  sell  gold  and  silver  as  articles  of 
commerce.  The  agriculturalist,  the  mechanic,  and  laborer 
will  be  the  peers  of  the  men  who  are  now  forming  an  aristoc 
racy  of  wealth ;  the  laws  will  be  faithfully  and  honestly  ad 
ministered,  and  peace  and  prosperity  will  fill  the  land. 


i 

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